On March 5, 2011, the Spanish Parliament amended the Spanish Competition Act 15/2007, affecting merger filing requirements and the changing the interaction between the National Competition Commission (NCC) and the national regulatory authorities (NRAs), which govern businesses in energy, telecommunications, pharmaceuticals, and other sectors. The main consequences of the amendments will be to decrease the number of merger filings and increase legal certainty in proceedings that require cooperation between the NRAs and the NCC.
1. Change in the Merger Thresholds
Amendment. The merger filing thresholds remain
unchanged and are still based on market-share (acquisition or
increase of a market share equal or higher than 30%) and turnover
(joint turnover of €240 million and individual turnover in
Spain of at least two participants above €60 million).
With the legislation, a new exception to the filing requirement
will apply to mergers that, by reason of the low value of the
target company, should not raise competition issues. Under the
amendment of article 8.1 of the Competition Act, combinations that
meet the 30% market-share threshold will not need to be notified if
(1) the target's turnover in Spain or the value of the assets
it has acquired in the last financial year do not exceed
€10 million and (2) the individual or joint market-share
of the parties is not 50% or more in any national or smaller
Consequence. A merger that results in a 49% market-share in Spain or a smaller market within Spain will be exempted from filing if the target company has a relatively low turnover (equal to or less than €10 million), even in cases where the acquiring company has an already high market-share (up to 48%). The amendment puts an end to scrutiny of operations that should not raise competition issues. This exemption will reduce the costs of completing these smaller transactions and reduce administrative burdens, including the obligation to suspend the merger, associated with the merger filing.
2. Cooperation between NRAs and the NCC
Amendment. The amendment also affects article
17 of the Competition Act, which regulates the interaction between
the NCC and the NRAs. The main change refers to the weight to be
given to the reports issued by the NCC and the NRAs in the course
of proceedings for the application of sector regulations or the
Competition Act. According to the newly drafted article 17, the
reports issued by the NRAs and the NCC in their respective fields
of competence (the NRAs in competition proceedings under the NCC,
the NCC in proceedings for the application of sector regulations by
the NRAs) shall be "decisive"; therefore, the NRAs and
NCC may dissent from such reports only through an expressly
Consequence. The prior text stressed such reports were not binding, which in practice meant that the NRAs and the NCC could completely disregard the reports without stating their reasons for doing so. Although the amendment does not make reports binding, they are deemed "decisive," and the NRA or the NCC must state its reason for discarding the findings of the other's report. This will increase legal certainty for the affected parties, by assuring that the decisions finally adopted will have carefully considered these reports and that any difference of opinion will have been adequately considered.
Application. The NRAs will request the NCC to issue a report before the adoption of instructions, notices, or decisions in application of sector-specific regulations that may significantly affect competition. Likewise, the NCC will request report from the NRAs in the course of merger proceedings and proceedings for violation of merger or infringement decisions and in infringement proceedings in regulated markets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.