Merger Control Comparative Guide -

1 Legal and enforcement framework

1.1 Which legislative and regulatory provisions govern merger control in your jurisdiction?

The Romanian merger control legal framework mainly consists of the provisions included in the following acts (with further amendments and republications, where applicable):

the Competition Law (21/1996);
the Merger Control Regulation approved by Order 431/2017;
the Guidelines on the Concepts of Concentration, Undertakings Concerned, Full-Function Joint Ventures and Turnover approved by Order 386/2010;
the Guidelines on Restrictions Directly Related and Necessary to Concentrations approved by Order 387/2010;
the Guidelines on Accepting Commitments for Concentrations approved by Order 688/2010; and
the Guidelines on Calculation of the Authorisation Fee approved by Order 439/2016.

The Romanian merger control rules apply to transactions that do not have an EU dimension but that qualify for review under Romanian law.

Under EU law, there is a referral mechanism between national authorities and the European Commission which allows for:

the commission to refer cases that meet the EU thresholds for review to national authorities (eg, the Romanian Competition Council (RCC)); and
member states to refer to the commission cases that do not meet the EU turnover threshold – including under the new approach of the commission set out in Article 22 of the EU Merger Regulation (139/2004), which encourages member states to refer cases to the commission even where they themselves do not have jurisdiction over the transaction if the criteria of Article 22 are met.

The RCC has issued various guidelines and regulations to clarify certain issues connected to the Romanian merger control regime. The RCC follows the various European Commission precedents and soft law (eg, guidelines on the assessment of horizontal mergers; ancillary restraint notice).

1.2 Do any special regimes apply in specific sectors (eg, national security, essential public services)?

The Romanian merger control regime is not sector specific. The general rules apply to transactions in all sectors.

Since 2012, Romania has had a voluntary screening mechanism for investments in certain sensitive sectors, irrespective of the nationality of the investor and/or the value of the investment.

In addition, in April 2022, Romania implemented EU Regulation 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the European Union, through the issuance of Emergency Government Ordinance 46/2022, which applies to direct and indirect non-EU investments that meet certain conditions (eg, conducted in certain sensitive sectors; with a value above €2 million). This screening mechanism also includes a standstill obligation until the review of the respective investment has been finalised by the newly established Romanian Commission for the Examination of Foreign Investments, subject to sanctions.

Under the new ordinance, the Romanian Commission for the Examination of the Foreign Investments can call in for review transactions under the threshold if, by their nature or their potential effects, in relation to the criteria set out in Article 4 of EU Regulation 2019/452, they may have an impact on security or public order or pose such risks.

In principle, the prohibition of a transaction due to national security concerns should take into consideration the competence of the European Commission in this respect.

The framework implemented by this ordinance was extended in June 2023, to apply the same screening procedure to EU investments as well.

Various approvals from and/or notifications to Romanian sector-specific regulators may be required for transactions in sectors such media, environment and telecommunications.

1.3 Which body is responsible for enforcing the merger control regime? What powers does it have?

The RCC, headquartered in Bucharest, is responsible for enforcing the merger control regime in Romania. The RCC has 42 small units located in each county, with the entire national team numbering approximately 500 employees.

Transactions notified to the RCC are reviewed by one of its three units (ie, Services, Industry and Energy, Consumer Goods), and cannot be implemented prior to clearance by the RCC. Within the respective unit, a case team is assigned to review and analyse each notification. The RCC can issue requests for additional information and, subject to judicial approval, can inspect companies to gather more information on the case.

Decisions are taken by a decision-making collegiate body, the Plenum of the RCC, consisting of seven members. For simplified cases, a committee of three out of seven members can review and approve the respective transaction.

All decisions are taken by majority. The RCC can decide:

to authorise a merger with or without commitments, obligations or conditions; or
to prohibit it altogether.

The RCC may issue cease and desist orders or order the dissolution of a merger under certain circumstances.

The RCC can fine companies for:

pre-clearance implementation ('gun-jumping');
non-compliance with the commitments, obligations or conditions attached to a transaction authorisation; and/or
allegedly illegal conduct relating to requests for information or inspections.

Further details can be found in question 7.

For transactions that are notified to the RCC, but that do not meet the relevant Romanian notification thresholds, the RCC issues a letter confirming the respective situation.

2 Definitions and scope of application

2.1 What types of transactions are subject to the merger control regime?

The Romanian merger control regime applies if a transaction qualifies as an 'economic concentration'. Similar to the European legislation, a concentration will be deemed to arise under the Romanian merger control regime where a change of control on a lasting basis results from:

the merger of two or more previously independent undertakings or parts of undertakings; or
the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings – whether by the purchase of securities or assets, by contract or by any other means – of direct or indirect control of the whole or parts of one or more other undertakings.

The creation of a joint venture performing on a lasting basis all functions of an autonomous economic entity will also constitute a concentration.

There are certain cases in which a concentration will not be deemed to arise, similar to those under the EU merger control legislation, as follows:

Control is acquired and exercised by an office holder designed by a court decision or by public authority for performing liquidation, winding-up, insolvency, cessation of payments, compositions or analogous proceedings.
Credit institutions or other financial institutions or insurance companies whose normal activities include transactions and dealing in securities for their own account or for the account of others hold, on a temporary basis, securities which they have acquired in an undertaking with a view to reselling them, provided that:
- they do not exercise voting rights in respect of those securities with a view to determining the competitive behaviour of that undertaking; or
- they exercise such voting rights only with a view to preparing the disposal of all or part of that undertaking or of its assets or the disposal of those securities; and
- any such disposal takes place within one year of the date of acquisition (this period may be extended by the Romanian Competition Council (RCC) on request where such institutions or companies can show that the disposal was not reasonably possible within the period specified).
Control is obtained by a financial holding company that has the purpose of acquiring holdings in other undertakings in order to manage and valorise such holdings, without involving directly or indirectly in the management the undertakings in which they have holdings, but rather to protect its rights as a shareholder, provided that the voting rights in respect of the holding are exercised – in particular, in relation to the appointment of members of the management and supervisory bodies of the undertakings in which it has holdings – only:
- to maintain the full value of those investments; and
- not to determine directly or indirectly the competitive conduct of those undertakings.
The transaction involves the reorganisation or restructuring of the activities performed by the undertakings, including those that are part of economic groups.

If, within a period of two years, there are two or more concentrations between the same parties (individuals and/or entities), such transactions will be considered as one economic concentration taking place on the date of the last transaction.

Under certain conditions, interdependent transactions – such as conditional transactions or parallel acquisitions of control or serial acquisition of control – will be considered as one single transaction. This also applies to a series of transactions in securities.

2.2 How is 'control' defined in the applicable laws and regulations?

As under the EU merger control legislation, 'control' is defined as the ability to exercise decisive influence over an undertaking. This ability may be conferred by rights, contracts or any other means, either separately or in combination, and having regard to the considerations of fact or law involved – in particular, by:

ownership or the right to use all or part of the assets of an undertaking; or
rights or contracts which confer a decisive influence on the composition, voting or decisions of the managing bodies of an undertaking.

Control can be:

de jure or de facto;
positive or negative; and
sole or joint.

The Romanian merger control regime is similar to the EU regime with respect to the concept of control. It also covers transactions that will lead to a change in the quality of control – in particular:

a change from sole to joint control (or vice versa); or
the entry of an additional jointly controlling shareholder.

2.3 Is the acquisition of minority interests covered by the merger control regime, and if so, in what circumstances?

Minority shareholdings are not currently subject to the Romanian merger control regime unless:

they confer control; and
the national turnover thresholds are met.

Therefore, an analysis of whether specific veto rights attached to the minority shareholding can confer control should be performed.

Such specific rights might include, for example:

preferential shares granting the right to appoint a majority of the governing body of the undertaking or conferring a majority of the votes on the board; and
certain veto rights for strategic decisions, such as:
- approval of the budget or the business plan;
- the appointment or dismissal of senior management; and
- the approval of certain investments.

Veto rights granted for the protection of financial interests as investors do not confer control.

The acquisition of non-controlling minority interests may require merger notifications under the rules of other member states.

2.4 Are joint ventures covered by the merger control regime, and if so, in what circumstances?

The creation of a joint venture that performs on a lasting basis all functions of an autonomous economic entity ('full-function joint venture') constitutes a concentration. This includes the acquisition of joint control over an existing business or the establishment of a newly established joint venture.

The rules for establishing full functionality of the joint venture are largely similar to those under the EU merger control regime.

If the Romanian thresholds are met (they can also be met based on the two parent companies' turnover only), the joint venture should be notified to the RCC.

Non-full-function joint ventures will be analysed under the rules for agreements/practices established under Article 5 of the Competition Law (which is fairly similar to Article 101 of the Treaty on the Functioning of the European Union).

2.5 Are foreign-to-foreign transactions covered by the merger control regime, and if so, in what circumstances?

Yes. Foreign-to-foreign transactions that meet the Romanian thresholds are subject to the local merger control rules, as the Romanian thresholds are based on the geographical allocation of the parties' turnover and can be met irrespective of whether the concerned parties have a Romanian presence.

2.6 What are the jurisdictional thresholds that trigger the obligation to notify? How are these thresholds calculated?

Concentrations must be notified and approved by the RCC prior to implementation if they meet the following national jurisdictional thresholds based exclusively on turnover:

The combined aggregate worldwide turnover of all undertakings concerned is more than €10 million; and
The Romanian turnover of each of at least two of the undertakings concerned is more than €4 million.

There are several principles for calculating the thresholds, but the undertakings concerned are different depending on the type of the transaction. Also, in case of an acquisition of control and/or a merger, the turnovers of the acquirer(s) and/or of the merging companies are considered at the level of their groups; while for the target, this is calculated considering its subsidiaries/controlled companies.

The seller(s)' turnover is not relevant for the threshold calculation only if the seller(s) will not maintain control after the transaction. Similarly, the turnover of those parts of the target that are not included in the transaction will not be considered.

The turnover comprises the amounts derived from the sale of products and the provision of services after deducting fiscal duties and exports performed directly and/or via intermediaries, including intra-EU sales. These amounts generally appear in company accounts under the heading 'sales'. Internal sales should be considered separately to avoid double counting.

Turnovers are those achieved in the most recent closed and audited financial year preceding the transaction. Generally, the RCC will refer to the accounts which relate to the closest financial year to the date of the transaction, and which have been audited under the standard applicable to the undertaking in question and compulsory for the relevant financial year. The turnover should be adjusted to accommodate any permanent acquisitions and/or disposals of entities/assets closed during and/or after the end of the relevant financial year.

Specific rules apply to the geographical allocation of the turnover, depending on the types of products and/or services sold and/or performed. For example, there are specific rules in sectors such as tourism and publicity, where services are sold through intermediaries.

There are specific rules for the calculation of the turnover of companies such as:

financial holdings;
investment funds;
credit institutions and other financial institutions; and
insurance companies.

Please see question 2.1 for information on two or more transactions within a period of two years and on interrelated transactions.

In certain cases, such transactions can be referred for review to the European Commission. Also, under the new approach of the commission to Article 22 of the EU Merger Regulation, a case that does not have an EU dimension and that does not meet the Romanian thresholds may still be referred by Romania or other member states for review by the commission.

2.7 Are any types of transactions exempt from the merger control regime?

Please see question 2.1 for the four exceptions.

Pursuant to the 'one-stop-shop' principle, if a transaction meets the European thresholds for notification to the European Commission and no referrals apply, there is no need to make a separate Romanian filing.

Please see question 1.2 regarding national security screening in Romania and, where relevant, sector-specific screening by the Romanian sector regulators.

3 Notification

3.1 Is notification voluntary or mandatory? If mandatory, are there any exceptions where notification is not required?

Notification to and approval by the Romanian Competition Council (RCC) before completion are mandatory for concentrations (see question 2.1 for the definition of a 'concentration') that meet the Romanian jurisdictional thresholds detailed in question 2.6. Please see question 3.8 on the standstill obligation and the relevant exceptions and applicable waivers.

Please see question 1.2 regarding national security screening in Romania and, where relevant, sector-specific screening by the Romanian sector regulators.

3.2 Is there an opportunity or requirement to discuss a planned transaction with the authority, informally and in confidence, in advance of formal notification?

The notifying party can have general discussions with the RCC on any jurisdictional and substantive issues on an informal and confidential basis in advance of formal notification. Typically, such discussions are recommended if they involve more complex questions such as:

potential concerns that the transaction may raise;
a complex structure and documentation; or
a tight closing timeline.

In such cases, the notifying party should:

start discussions with the RCC at least two weeks in advance of registration of the file; and
submit certain brief information (eg, transaction structure, parties, relevant markets, estimated shares) at least five days ahead of the meeting.

3.3 Who is responsible for filing the notification?

The party responsible for filing is the party acquiring control, which will depend on the type of transaction. In case of a sole control acquisition, the acquirer is responsible for filing the notification. In an acquisition of joint control, a merger or the creation of a full-function joint venture, the parties acquiring joint control, the merging parties or the joint venture partners respectively are responsible for filing the notification. Shareholders in the target that are not involved in the transaction, but that will continue to have control (jointly), are equally responsible for the notification.

The undertakings responsible for filing the notification can do this by themselves or through a legal representative.

3.4 Are there any filing fees, and if so, what are they?

A fixed filing fee of RON 4,775 must be paid when submitting the notification.

Once the decision has been issued, an authorisation fee must be paid within 30 days of receiving a copy of the decision, the amount of which will depend on the economic significance of the transaction and the efforts of the RCC.

The level of the authorisation fee is calculated by the notifying party and submitted for approval to the RCC, which then specifies the exact amount in the approval decision. This fee is based on the level of turnover in Romania in the year preceding the transaction of either:

the merging entities;
the parent companies of a newly established joint venture or an existing joint venture; or
the acquired target or assets.

It ranges between €10,000 and €50,000, with higher amounts being payable in case of Phase 2 reviews.

If the relevant Romanian turnover is not final at the date of the decision, the authorisation fee is calculated on the existing final financial statements and is then recalculated once the relevant financial statements become final.

Both fees are payable by the party responsible for filing the transaction.

3.5 What information must be provided in the notification? What supporting documents must be provided?

The Romanian notification must be provided using a standard template which can be found in the annex to the Romanian Merger Control Regulation. Similar to the European forms, there are two Romanian standard forms: a long one and a short one, which is available for simplified cases (see question 4.3).

The standard long form requires significant amounts of information, in particular for transactions where there are horizontal and/or vertical affected markets. Horizontal affected markets are those in which both parties have a combined market share of 20% or more. Vertical affected markets are upstream or downstream markets in which one or both parties have an individual or combined market share of 30% or more.

The information required in the long form includes – in addition to the transaction structure, the ancillary restraints and a description of the concerned undertakings and their groups, market and financial data for the latest three financial years preceding the transaction – information such as:

definitions of the relevant product and geographical markets concerned by the concentration, as well as the affected or declared markets;
the worldwide, EU and Romanian turnovers of the concerned parties and their groups;
market share estimates of the parties and their main competitors, including the contact details for main market participants;
a list of the parties' principal customers and suppliers, the relevant sales and purchases and their contact details;
a description of the competitive landscape in the affected markets, such as details on offer and demand, barriers to entry, research and development, distribution and imports, and professional associations;
whether any cooperative or vertical issues arise from the transaction; and
different kinds of efficiencies.

In addition to the standard form, the notifying party must submit other relevant documents, such as:

the financial statements of the parties to the transaction and their parent companies for the last audited financial year;
the full agreements giving rise to the transaction (translated into Romanian – sometimes the RCC requests a full translation, not of only relevant excerpts);
analysis, reports or studies that are considered relevant;
cooperation agreements or other ancillary agreements;
power of attorney (if the notification is submitted through a representative);
evidence of payment of the filing fee; and
reports or documents prepared by or requested from third parties for the management body, shareholders, investors or analysts of the undertakings concerned.

The short form is a simplified template submitted in the context of a simplified procedure to be used in transactions where:

there is no overlap between the parties;
there are no affected markets; and
the relevant joint venture has/is estimated to have less or no activity in Romania.

This form requires significantly less market information and data.

The RCC has discretion to decide whether the simplified or standard procedure should be used (eg, if there is no good relevant data for market share estimates or no good precedents on the definition of the relevant markets), even after the parties have submitted a short form, in which case additional information must be provided.

In case of a lack of information or documents, the RCC may require the notifying parties to correct such deficiencies within 20 days, granting them a deadline of up to 15 days to do so (any extension of the initial deadline will be given within the maximum 15 days).

3.6 Is there a deadline for filing the notification?

No deadline is set for filing the notification to the RCC. However, a transaction that is notifiable under Romanian law cannot be implemented without the RCC's clearance.

One exception exists for public takeover bids relating to securities listed on a stock exchange market or for a series of transactions with securities, including convertible securities, through which control is acquired from different sellers, subject to the following conditions:

The transaction is notified without delay to the RCC; and
The acquirer of control does not exercise the voting rights attached to the securities or exercises them only:
- to protect the value of its investment; or
- upon the grant of special exemption authorisation by the RCC.

3.7 Can a transaction be notified prior to signing a definitive agreement?

Indeed, a transaction can be notified to the RCC based on a document that shows the parties' good-faith intention to enter into a definitive agreement (eg, a letter of intent, a memorandum of understanding or a term sheet). For public bids, the filing can be made after announcing the public offer and possibly after the procedures for the public bid have started.

In some cases, the RCC issues authorisation based only on such documents and, if any, copies of the close-to-final draft of the definitive agreements. However, the parties must notify the RCC of any changes to the information and documentation submitted (eg, this could include the signing of the definitive agreements and the corresponding execution versions of the agreements).

3.8 Are the parties required to delay closing of the transaction until clearance is granted?

There is a standstill obligation for the concerned parties: they cannot implement the transaction – even partially – before clearance has been granted by the RCC. If the parties decide to close nonetheless, the RCC may:

order some interim measures to maintain competition on the market;
dissolve the transaction; and
apply fines.

There are two exceptions to this standstill obligation:

if the RCC specifically decides to exempt the parties from this obligation, allowing them to implement it. This waiver may be given subject to a number of conditions and obligations, and following the parties' request and submission of various types of financial and economic information, if the RCC considers that the potential threats to competition caused by implementation of the transaction would not be outweighed by the damage that would be caused to the parties by delaying closing until clearance was issued. This waiver is rarely granted in practice by the RCC and only in very exceptional circumstances, with the majority of such exemptions involving targets close to insolvency; or
in the case of a public bid or a series of transactions with securities – please see question 3.6 for the specific conditions in this case.

3.9 Will the notification be publicly announced by the authority? If so, how will commercially sensitive information be protected?

As a rule, the notification is announced via a press release on the RCC's website as soon as the file is registered (up to one week). A proposed draft (including the parties' names, their business activities and whether a simplified procedure is considered) should be provided by the parties together with the notification form. Commercially sensitive information will be protected. The press release will invite third parties to comment on the likely effects of the transaction. A similar press release will be published once the RCC has approved the transaction. The notification file will not be published.

There is a separate specific procedure for any interested third parties to access such data, which involves the protection of business secrets and other confidential information of the parties. The non-confidential version of the final decision on the case is also published (excluding the confidential information).

Exceptionally, the notifying parties can submit a reasoned request to the RCC to postpone publication of such press release until a later date; the RCC remains free to finally decide on such matter. In complex cases or where the RCC needs to perform a market test, this exception is unlikely to be applicable.

4 Review process

4.1 What is the review process and what is the timetable for that process?

Under Romanian law, there is no framework for pre-notification, but the Romanian Competition Council (RCC) must confirm that the filing is complete, in which case the filing will be given an effective date (ie, no additional information is necessary for the case team to finalise the review).

Upon registration of the file, the RCC must:

confirm within seven days that the file has been formally registered (ie, the filing fee has been paid and all necessary documentation – such as the notification form, the transaction documents and the financial statements – has been included in the file); and
request any additional information on the case within 20 days.

The RCC can send more than one set of additional questions to the parties, but one set is customary in simplified cases. There is no deadline specified for the second set of questions, but it is customary for these to be sent within 20 days of receiving the answers to the first set of questions.

Once a notification is confirmed as complete, the RCC has 45 days (Phase 1) to decide whether to clear the transaction or to initiate an in-depth review (Phase 2). Many cases are cleared during Phase 1. Simplified notifications are cleared faster by the RCC, often within two months of registration. If the RCC does not clear the transaction or initiate Phase 2 within the 45-day review period, the transaction is deemed to have been cleared by operation of law once this 45-day review period has elapsed (however, in practice, this period begins from confirmation of the effective date of the file, which can be assumed to be the registration date if the RCC has not requested additional questions).

During Phase 1, the RCC can:

authorise the transaction subject to commitments/remedies proposed by the notifying parties to address the potential concerns resulting from the transaction (during Phase I and II, the notifying parties can submit commitments to the RCC in order to address any concerns on the transaction (see question 5.1));
send the case to the European Commission if it considers that the commission has jurisdiction over the transaction; or
close the proceedings by issuing a simple letter if it considers that the transaction is not subject to merger control (eg, it does not meet the national thresholds for filing, or it is not an economic concentration as it does not involve a change of control).

The RCC will initiate Phase 2 if:

it needs further time for its assessment; or
the parties did not propose appropriate remedies during Phase 1.

If the RCC intends to initiate Phase 2, it must inform the parties accordingly during the Phase 1 period. The initiation of Phase 2 extends the review period to five months. During Phase 2, the RCC can either clear or prohibit the transaction. If it does not issue a decision, the transaction is deemed to be cleared once the five-month review period has elapsed (again, in practice, this period begins from confirmation of the effective date of the file, which can be assumed to be the registration date if the RCC has not requested additional questions).

As in Phase 1, during Phase 2 the RCC can:

send the case to the European Commission if it considers that the commission has jurisdiction over the transaction; or
close the proceedings by issuing a simple letter if it considers that the transaction is not subject to merger control.

The final decision of the RCC is communicated to the notifying parties and a non-confidential version is published on the RCC's website. The notifying parties have 30 days from receipt of the decision to pay the authorisation fee, with the respective amount and payment details being included in the decision.

4.2 Are there any formal or informal ways of accelerating the timetable for review? Can the authority suspend the timetable for review?

There are no formal ways to accelerate the timetable for review. However, the parties can approach the RCC to request a pre-filing meeting in order to discuss the case and provide preliminary information before officially submitting the file. In theory, this should help the case team to review the case quickly and easily.

The preparation of comprehensive draft notifications (including market data and market shares estimates) may also accelerate the review timetable.

In general, if the parties can demonstrate a reasonable need for speedy review, the RCC may be willing to shorten the clearance time as practicably as possible.

The Phase I and II timetables may be suspended by stopping the clock if the RCC issues requests for additional information within a specified timeframe.

4.3 Is there a simplified review process? If so, in what circumstances will it apply?

A simplified procedure is available for certain transactions. In such cases, the parties can submit a simplified form, which is less onerous to complete than the standard form. An application for the simplified procedure is at the discretion of the RCC, as it is not bound by its decision to follow the simplified procedure and may revert to the standard procedure even where a transaction meets the criteria for the simplified procedure and a simplified form has been submitted by the parties.

The circumstances in which the simplified procedure may apply include concentrations where:

two or more undertakings acquire joint control of a joint venture with negligible or no foreseen activities within Romania – that is, where, at the time of the notification:
- the Romanian turnover is less than €4 million; and
- the total value of assets transferred to the joint venture is less than €4 million in the Romanian territory;
no horizontal or vertical overlaps exist between the undertakings concerned;
two or more undertakings merge, or one or more undertakings acquire sole or joint control of another undertaking, where the combined market share of all parties engaged in business activities:
- in the same product and geographical market is less than 20%; and
- in upstream or downstream markets is less than 30%; or
a party acquires sole control of an undertaking over which it already has joint control.

Even if the above circumstances are met, the RCC may still request the notifying parties to submit a standard form – for example, in the following scenarios:

There are no precedents for the relevant market definitions or the relevant markets are difficult to define;
One of the undertakings is the actual or potential owner or user of an important patent, or a new competitor;
It is not possible to properly determine the market shares of the undertakings or there are no declared markets.
At least two of the undertakings operate in closely related adjacent markets;
The transaction may lead to coordination issues; or
As a consequence of the transaction, one party will acquire sole control over a joint venture over which it already had joint control, where the acquiring party and the joint venture have jointly a strong market position or have strong positions in vertically related markets.

If the RCC requests a standard form to replace a simplified form, the deadlines to adopt and notify the decision will start again from the date on which the standard form is filed.

Similarly, the RCC may decide to apply the simplified procedure even if the parties have submitted a standard form. In this case, the parties do not need to replace the standard form with a simplified form.

4.4 To what extent will the authority cooperate with its counterparts in other jurisdictions during the review process?

The RCC regularly exchanges information with the European Commission, both within the European Competition Network (ECN) and with certain other authorities that are not part of the ECN. Cooperation typically takes place where the transaction raises similar substantive or jurisdictional issues in several jurisdictions. For instance, the authorities may discuss conceptual frameworks, theories of harm or appropriate remedies. However, confidential information of the parties submitted within a notification file may be exchanged only if the parties have granted a special waiver of confidentiality.

4.5 What information-gathering powers does the authority have during the review process?

When reviewing a file, the RCC has the right to request all documents and information necessary for its competitive assessment of a transaction or for the parties to correct any deficiencies. This additional information will be requested by way of a formal information request (in the large majority of cases) or informally (by phone).

The request for information must clearly identify:

the information sought;
the legal basis on which the request relies;
the purpose of the request; and
the penalties (see question 7.1) that the parties will face if they provide incorrect or misleading information purposefully or negligently.

In more complicated cases, requests for additional information can be also sent to third parties (eg, customers, competitors and suppliers) or public authorities. Undertakings must respond, and their response must be complete and not misleading.

If an information request is not answered, or is not answered correctly, fully or in time, the RCC may impose a fine of up to 1% of the total turnover achieved in the last financial year.

4.6 Is there an opportunity for third parties to participate in the review process?

Yes. On receiving a notification file, the RCC will publish a press release on its website:

stating the transaction analysed and the names and business activities of the parties; and
requesting input from interested parties within a specific timeframe (ranging from 10 to 15 days to one month or more).

If an information request is not answered, or is not answered correctly, fully or in time, the RCC may impose a fine of up to 1% of the total turnover achieved in the last financial year.

Also, if remedies/commitments are required in a specific case, the RCC will publish the remedies for public consultation on its website and will consider any reasonable comments received from third parties with respect to the transaction.

4.7 In cross-border transactions, is a local carve-out possible to avoid delaying closing while the review is ongoing?

Apart from specific exceptions to the standstill rule (see question 3.8), there are no local carve-out provisions that allow the undertakings to avoid delaying closing while the review is ongoing.

As such, it is highly recommended:

to carefully assess the possibility of a carve-out if there are arguments that the implemented transaction has no effect in Romania; and
to discuss this envisaged carve-out with the RCC before closing the transaction in other jurisdictions.

4.8 What substantive test will the authority apply in reviewing the transaction? Does this test vary depending on sector?

Romania has adopted a similar test to that used in most EU jurisdictions – that is, a concentration will be prohibited if it would raise significant obstacles to effective competition on the Romanian market or a substantial part of the Romanian market, particularly due to the creation or strengthening of a dominant position.

Historically speaking, this test has primarily been applied in relation to the creation or strengthening of a dominant position, with a rebuttable presumption of dominance applicable to an aggregate market share exceeding 40% on the relevant market. However, a finding of dominance will take into account a number of factors, including:

the market share of the competitors;
the existence of barriers to entry;
countervailing buyer power;
the evolution of market share; and
the oligopolistic nature of the market.

The same test is applied in all economic sectors.

4.9 Does a different substantive test apply to joint ventures?

Joint ventures are assessed using the same substantive test as other types of transactions. Furthermore, in the event of the creation of a full-function joint venture, the risk of coordination between the parent companies is assessed in accordance with the rules on anti-competitive agreements (ie, Article 5 of the Competition Law and/or Article 101 of the Treaty on the Functioning of European Union).

4.10 What theories of harm will the authority consider when reviewing the transaction? Will the authority consider any non-competition related issues (eg, labour or social issues)?

The Romanian competition regime has no equivalent of the EU horizontal guidelines, so the theories of harm provided are general in scope. As such, the RCC will take the following into account in its assessment of a merger:

the need to protect, maintain and develop effective competition in the Romanian market or in a substantial part thereof, having regard, among other things, to:
- the structure of all markets concerned; and
- actual or potential competition;
the market position of the parties involved and their economic and financial strength;
the alternatives available to suppliers and users, their access to supply sources or markets and any legal or other barriers to entry;
trends in supply and demand for the relevant goods and services; and
the interests of intermediate and ultimate consumers and technical and economic progress, provided that the transaction is to consumers' advantage and does not constitute a barrier to competition.

Efficiencies brought about by the respective merger will be taken into account in the RCC's assessment.

5 Remedies

5.1 Can the parties negotiate remedies to address any competition concerns identified? If so, what types of remedies may be accepted?

The parties may offer commitments, either behavioural or structural, and will normally do so when the proposed concentration raises significant concerns regarding its effect on the market.

In the past, the Romanian Competition Council (RCC) has shown itself to be open to both structural and behavioural commitments; but generally speaking, structural commitments are preferred – particularly when they are offered during Phase I of the merger control proceedings. Divesture commitments are seen as being the most capable of alleviating competition concerns in horizontal mergers and of potentially alleviating concerns raised by vertical or conglomerate effects. Commitments relating to the future conduct of the merger entity are acceptable only in certain circumstances, if:

their viability is fully guaranteed by effective implementation and monitoring; and
they do not risk leading to distortions of competition.

That said, there have been cases in which the RCC has been satisfied with behavioural commitments – for example, a commitment not to raise prices above a certain threshold in several hypermarkets – when structural commitments might have been as effective and easier to implement.

The proposed commitments must:

alleviate the competition concerns identified by the RCC; and
be capable of being implemented within a relatively short timeframe.

Insofar as structural commitments are concerned, the RCC must be able to conclude, with a reasonable degree of certainty, that the resulting economic entities are viable.

The RCC may reject extremely complex commitments which make it impossible to determine ab initio:

whether they will be fully implemented; and
whether their implementation will remove the obstacles to competition raised by the concentration.

5.2 What are the procedural steps for negotiating and submitting remedies? Can remedies be proposed at any time throughout the review process?

During the review process, the RCC will inform the parties of any concerns raised by the economic concentration at hand. The parties will then be expected to propose commitments to alleviate those concerns.

The commitments may be put forth both during:

Phase I – before the notification becomes effective or within two weeks of the notification becoming effective; and
Phase II – within 30 days of launch of the investigation, with the RCC having the possibility to extend this term by up to 15 days at the request of the parties if there are exceptional circumstances which justify an extension.

Mergers can be cleared with commitments during both Phase I and Phase II.

As a matter of practice, since the RCC only carries out an in-depth analysis of the market during Phase II, any commitments proposed in Phase I must be sufficiently comprehensive to eliminate any competition concerns identified, even if some of those concerns would be eliminated after a Phase II investigation.

The RCC must decide whether the proposed commitments alleviate the competition concerns, but the parties are expected to provide the relevant information needed for the RCC to make its determination. The RCC will usually market test the commitments, allowing third parties to have a say on their suitability to alleviate the competition concerns identified by the RCC.

The commitments become binding on the parties through the clearance decision issued by the RCC.

5.3 To what extent have remedies been imposed in foreign-to-foreign transactions?

To the best of our knowledge, no commitments have been imposed in connection with a foreign-to-foreign transaction, defined as a transaction where neither party has a presence in Romania.

6 Appeal

6.1 Can the parties appeal the authority's decision? If so, which decisions of the authority can be appealed (eg, all decisions or just the final decision) and what sort of appeal will the reviewing court or tribunal conduct (eg, will it be limited to errors of law or will it conduct a full review of all facts and evidence)?

The parties may appeal the Romanian Competition Council's (RCC) decision to he Bucharest Court of Appeals within 30 days of communication of the decision, on points of both fact and law.

The decision of the Bucharest Court of Appeals may be reviewed by the High Court of Cassation and Justice, on points of law only.

6.2 Can third parties appeal the authority's decision, and if so, in what circumstances?

Although an extremely rare occurrence in practice, third parties can appeal any RCC decision, provided that they can justify a legitimate interest in doing so.

7 Penalties and sanctions

7.1 If notification is mandatory, what sanctions may be imposed for failure to notify? In practice, does the relevant authority frequently impose sanctions for failure to notify?

Failure to notify an economic concentration before implementation may be sanctioned with a fine of up to 10% of the parties' turnover in the year prior to the sanctioning decision being issued. The relevant turnover considered is the worldwide turnover of the infringing party – that is, the undertaking which was obliged to notify the transaction.

The amount of the fine will be established taking into account:

the gravity and duration of the offence; and
any mitigating and/or aggravating circumstances.

Even so, the minimum fine:

is set at 0.5% of the relevant turnover before any mitigating circumstances are taken into account; and
cannot be reduced to below 0.2%.

Insofar as non-residents are concerned, turnover will include:

revenues derived by Romanian-registered companies controlled by the infringing party;
revenues derived in Romania by non-Romanian-registered companies controlled by the infringing party; and
revenues derived in Romania by the infringing party.

In addition, fines of between 0.1% and 1% of the worldwide turnover of the infringing party in the year prior to the sanctioning decision being issued may be imposed for providing incorrect or misleading information.

7.2 If there is a suspensory obligation, what sanctions may be imposed if the transaction closes while the review is ongoing?

The Competition Law expressly provides for a standstill obligation – that is, a notified concentration cannot be implemented prior to the RCC issuing its decision. Failure to observe the standstill obligation results in the same sanctions as failure to notify.

The notifying parties may request the RCC to waive the standstill obligation and issue a derogation decision, allowing either partial or full implementation of the transaction before the issuance of the clearance decision.

7.3 How is compliance with conditions of approval and sanctions monitored? What sanctions may be imposed for failure to comply?

The RCC may:

monitor the implementation of the commitments itself; or
if the monitoring is complex and requires additional resources, enlist the aid of a monitoring trustee.

The monitoring trustee will act under the supervision of the RCC, and the RCC may issue orders and instructions to the respective trustee. The parties cannot instruct the trustee without the prior approval of the RCC.

Failure to comply with the conditions of approval will be sanctioned in the same way as failure to notify.

8 Trends and predictions

8.1 How would you describe the current merger control landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The past 12 months have seen the largest number of merger control proceedings in Romania over more than a decade: 94, up from an average of around 65 to 70. This is indicative of steady growth in M&A activity, which is likely to be sustained throughout 2023. Indeed, despite the complex geopolitical climate and a burdensome financial context, Romania has seen the second-largest inflow of foreign direct investment between EU member states in recent years.

While there are no legislative updates planned for merger control, the new regime for foreign investment screening is very likely to affect merger control proceedings, on both:

procedural grounds (eg, longer review periods and slightly less predictable outcomes); and
substantive grounds (eg, remedies, triggering events).

9 Tips and traps

9.1 What are your top tips for smooth merger clearance and what potential sticking points would you highlight?

As a general observation, we always find that an early information-gathering process is crucial in ensuring smooth clearance. This allows for potential risks to be identified, mitigated or accounted for, both contractually and strategically, in the deal-making process by the time they are formally reviewed.

Furthermore, due to the implementation of the new foreign investment screening regime – which is still undergoing legislative revisions, and in connection with which clearance is provided through a Romanian Competition Council (RCC) decision – we recommend that transactions be structured with a view to accommodating specific risks (eg, structural/behavioural remedies or longer, less predictable timelines).

Finally, since the RCC's enforcement powers have been extended to a number of additional areas – such as the implemented Unfair Trading Practices Directive, EU Regulation 1050 and the revamped unfair competition regime – without a corresponding increase in personnel, the time required for merger review may increase substantially, especially if the transaction raises competition concerns. To this end, we recommend that the parties initiate their preparations earlier and consider drafting economic analysis and/or potential commitments if competition concerns are identified from the beginning, with a view to streamlining the process.

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.

Romania: Merger Control Comparative Guide