Introduction
At the beginning of July 2013, the Republic of Croatia acceded
to the European Union and thereby completed its two-decade long
endeavours to attain EU Membership. From the very onset of these
endeavours, competition law has undergone constant transformation
and alignment with EU rules. Nevertheless, certain provisions of
the Croatian competition law regime that deviated from EU rules or
would have hindered their full implementation remained in place
until shortly before EU accession. Amendments to the Competition
Act ("Act") in July did away with these
peculiarities.
The amendments essentially refer to three categories of legal
rules: one category refers to further harmonizing Croatian rules
with the EU Merger Control Regulation Council Regulation (EC) No.
139/2004. A second set of amendments aim at harmonizing Croatian
provisions with Council Regulation (EC) No. 1/2003. The third
category refers to modifications of the existing procedural
solutions. In this Legal Insight, we want to focus on amendments to
the merger control regime.
Changes to merger control rules
Fines for early implementation of a mergerCroatian law always contained a suspension clause, meaning that
transactions that met the jurisdictional thresholds could only be
implemented once cleared by the Croatia Competition Agency
("Agency"). However, according to the fining provisions,
a fine of up to 10% of the worldwide turnover of the parties to the
transaction could be imposed for gun-jumping only if the
transaction subsequently was not cleared or cleared differently
than implemented.
This loophole has been closed: Now, if a notifiable transaction is
consummated without prior approval by the Agency but subsequently
cleared as implemented by the parties, a fine not exceeding 1 % of
the total turnover in the preceding business year can be imposed
pursuant to Article 62 of the Act (as previously, a fine of up to
10% can be imposed if the implemented transaction is subsequently
prohibited by the Agency or cleared differently than
implemented).
Co-operative joint ventures
In a further step of aligning EU and Croatian rules, Article 6 of
the Act now clarifies that merger control approval is required for
the establishment of co-operative joint ventures, i.e. a joint
venture on a more permanent basis with the aim or effect of
coordinating the activities of the joint venture partners of
undertakings. The aspects of coordination between the joint venture
partners shall be assessed against the compatibility with the
cartel prohibition. In addition, it shall be assessed whether the
joint venture leads to a significant lessening of competition in
the markets it will operate in.
Croatian vs EU merger control rules
For the sake of completeness, the Act enshrines the EU one-stop
shop principle, pursuant to which the EU Commission is solely
responsible for assessing transactions that have an EU dimension.
The EU Commission's competence generally deprives national
authorities of their competence. The Act therefore makes clear that
a merger needs no filing with the Agency if the merger has an EU
dimension.
The EU Merger Control Regulation allows for cases with an EU
dimension to be referred to national competition authorities. To
make provision for such referral from the EU Commission to the
Agency, the Act stipulates that in such scenario parties to the
concentration are obliged to notify the concentration to the Agency
within 30 days of the day of the receipt of such a referral
decision by the European Commission.
Explicit merger control approval and amendments of
conditional approvals
Until July, parties could only receive a clearance certificate
after submitting a special request. The Act changed this system and
now sets out that the Agency shall, without delay, issue the
declaratory clearance certificate (notice) pro-actively.
A further administrative change relates to conditional approvals:
So far, if a condition imposed on the merging parties together with
the approval decision could not be met at all or within the time
frame set by the Agency, the decision had to be altered completely.
With the new act, it is possible to partially withdraw the
decision, impose different remedies, or prolong the time limit for
the implementation of the undertakings.
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.