1 Relevant Authorities and Legislation
1.1 Who is/are the relevant merger authority(ies)?
Macedonian Commission for Protection of Competition
The Commission for Protection of Competition (the "Commission", http://www.kzk.gov.mk) was established in 2005 as an independent administrative body. Pursuant to the Commission's reports, there were no merger notifications filed in 2005, while the Commission resolved 9 merger control cases in 2006 and 23 in 2007. 28 merger notifications were assessed in 2008 (out of which 26 were cleared in summary proceedings, 1 was cleared conditionally and 1 notification was rejected). In 2009 there were 17 merger notifications, while in 2010, there were 22. In 2011, 18 notifications were cleared and 3 were rejected. According to the data on http://www.kzk.gov.mk, in 2012, the Commission has received 10 notifications so far, while in the last two years, it has assessed 32 notifications, clearing all of them.
Administrative Court of Macedonia
Decisions of the Commission can be challenged before the Administrative Court of Macedonia. The procedure before the court is governed by the Law on Administrative Disputes (Official Gazette of RM, nos. 62/06, 105/10).
1.2 What is the merger legislation?
An effective merger control regime was introduced into the Macedonian legal system by the Law on the Protection of Competition (Official Gazette of the Republic of Macedonia, nos. 4/05, 70/06, 22/07; "2005 LPC") which became effective on 1 January 2005 providing for both a procedural and substantive legal framework of merger control. On 13 November 2010, the Law on the Protection of Competition (Official Gazette of Macedonia, nos. 145/10, 136/11) ("LPC") entered into force and replaced the 2005 LPC. The last amendment of the LPC was introduced at the end of 2011. The Law on General Administrative Proceedings (Official Gazette of Macedonia, nos. 38/05, 110/08) governs aspects of the proceedings before the Commission to the extent that these aspects are not regulated by the LPC.
With respect to merger control, the government adopted the new Ordinance on the Form and Contents of the Notification of Concentration and the Necessary Documentation which is submitted together with the Notification (Official Gazette of the Republic of Macedonia no. 44/12) ("Ordinance on the content of the merger notification") in 2012.
Further, the Commission adopted several guidelines under the LPC. The following Commission Guidelines are applicable to merger control (some of the guidelines can be found in English on the Commission's website at: http://www.kzk.gov.mk/eng/zapis.asp
- Guidelines for determining the cases in which when assessing concentrations the Commission for the Protection of Competition may issue summary decisions (June 2012).
- Guidelines on defining relevant markets for the purpose of the LPC (May 2011).
- Guidelines on the manner of preparing a non-confidential version of a Commission decision (February 2011).
- Guidelines on the method of setting fines (January 2011);
- Guidelines on remedies acceptable to the Commission under chapter III of the 2005 LPC on the control of concentrations (December 2009).
- Guidelines on Assessment of Vertical and Conglomerate Concentrations (November 2008).
- Guidelines on Assessment of Horizontal Concentrations (April 2007).
1.3 Is there any other relevant legislation for foreign mergers?
The LPC applies to foreign mergers, provided that the jurisdictional thresholds are met. Please refer to question 2.6.
1.4 Is there any other relevant legislation for mergers in particular sectors?
The LPC applies to all undertakings irrespective of the industry they are active in. Transactions in the following sectors are also subject to sector-specific legislation:
- Banking: Direct or indirect acquisitions of a qualified shareholding (i.e. 5%, 20%, 33% and 50%) in Macedonian banks can only be consummated subject to approval by the National Bank of Macedonia ("NBM") – Article 59 of the Law on Banks (Official Gazette of RM, nos. 67/07, 90/09, 67/10).
- Insurance: Direct or indirect acquisitions of a qualified shareholding (i.e. 10%, 20%, 33%, 50% and 75%) in Macedonian insurance companies requires the prior approval by the Minister of Finance – Article 18 of the Law on Supervision of Insurance (Official Gazette of RM, nos. 27/02, 79/07, 88/08, 67/10, 44/11).
- Investment funds: Direct or indirect acquisitions of a qualified shareholding (10%, 20%, 30% and 50%) require the prior approval by the Securities Exchange Commission – Article 13 of the Law on Investment Funds (Official Gazette of RM, nos. 12/09, 67/10, 24/11).
- Voluntary pension funds: Any acquisition of shares requires the prior approval of the Voluntary Pension Insurance Agency (Article 27 of the Law on Voluntary Pension Funds and Pension Schemes (Official Gazette of RM, nos. 07/08, 124/10, 17/11).
- Media: The Broadcasting Law (Official Gazette of RM, nos. 100/05, 19/07, 103/08,6/10, 145/10, 97/11, 13/12) contains provisions under which circumstances a concentration in the media sector can be prohibited.
- Electronic communication: Pursuant to the Law on Electronic Communication (Official Gazette of RM, nos. 13/05, 14/07, 55/07, 98/08, 83/10, 13/12, 59/12), concentration involving an operator with the significant market power requires the prior approval of the competent authority.
- Concessions: Although the Law on Concession and Other Types of Public Private Partnerships (Official Gazette of RM, nos. 7/08, 139/08, 64/09, 52/10) does not contain specific merger control rules, nor change of control clauses in the concession agreements require prior approval of the Government of Macedonia for the change of control in concession companies – Article 8 of the Law on Concessions.
2 Transactions Caught by Merger Control Legislation
2.1 Which types of transaction are caught – in particular, how is the concept of "control" defined?
The following types of concentrations are caught:
- a merger of two or more previously independent undertakings or parts thereof;
- any acquisition of direct or indirect control over the whole or part of another undertaking or undertakings by acquisition of securities or assets, by means of agreement or by any other means stipulated by the law, by (i) one or more persons already controlling at least one undertaking, or by (ii) one (sole control) or more undertakings (joint control);
- or the establishment of a full function joint venture.
An undertaking is deemed to have control over another undertaking if it has the possibility to exercise decisive influence on the latter's activities. Such influence can be based on rights, agreements or any other legal or factual basis and, especially, on the ownership right or the right to use (parts of) the assets of an undertaking, on contractual authorisation or any other basis which creates the possibility to influence the structure, activity and decision-making of an undertaking. The LPC defines the controlling undertaking/person as an undertaking/person that directly or indirectly holds rights or is entitled to exercise the rights on a contractual basis.
2.2 Can the acquisition of a minority shareholding amount to a "merger"?
Yes, if by acquisition of a minority shareholding, an undertaking acquires sole or joint control over another undertaking, this shall amount to a concentration which has to be notified. As stated above, an undertaking is deemed to have control over another undertaking if it has the possibility to exercise decisive influence on the latter's activities. The question whether one exercises control over an undertaking has to be assessed on a case-by-case basis. The LPC and the existing by-laws do not provide details on what is sufficient to exercise decisive influence. The LPC only provides that such influence may, in particular, be exercised by ownership or rights over assets of an undertaking, as well as rights or agreements which confer the possibility for exerting decisive influence over the composition, voting or decision-making of the bodies of the undertaking. However, it can be assumed that the Commission would look at applicable EU rules and practice for guidance on novel questions that arise in this respect.
2.3 Are joint ventures subject to merger control?
The establishment of a joint venture that will perform on a lasting basis all the functions of an autonomous economic entity (i.e. full function joint ventures) is subject to merger control. However, if the establishment of a joint venture purports to coordinate the market activities between its mother undertakings or between a mother undertaking and the joint venture, the joint venture is not deemed a concentration, but instead falls within the ambit of the cartel prohibition.
2.4 What are the jurisdictional thresholds for application of merger control?
A merger notification is compulsory whenever one of the following thresholds is met:
- the combined worldwide annual turnover of the undertakings concerned in the preceding financial year exceeds EUR 10 million in denar counter-value pursuant to the exchange rate applicable on the date of completion of the annual accounts, whereby at least one of the undertakings is registered in the territory of Macedonia;
- the aggregate national annual turnover of all the participants to the concentration in the year preceding the concentration is at least EUR 2.5 million in denar counter-value pursuant to the exchange rate applicable on the date of completion of the annual accounts; and/or
- the market share of the one of the undertakings is over 40% or the joint market share exceeds 60%.
The LPC defines participants to the concentration as (i) the merging undertakings in case of a merger of two or more previously independent undertakings or parts thereof, or (ii) the persons or undertakings acquiring control of the whole or parts of one or more other undertakings, as well as the undertakings or parts thereof over which control is acquired.
Against the background of the above, no physical presence in Macedonia is required for a filing obligation to arise as long as the thresholds are met through cross-border sales. However, takeover bids for joint stock companies with registered seat in Macedonia require notification to the Commission irrespective of whether any of the thresholds mentioned above are met.
Turnover means all revenues derived from the sale of products or the provision of services in the ordinary course of business of an undertaking after deduction of (i) excise duties, and (ii) intra-group sales. The turnover of an undertaking concerned comprises the total turnover of the group it belongs to, i.e. its subsidiaries, mother undertakings, its mother undertakings' subsidiaries and any other undertakings controlled in the sense of the Macedonian Companies' Act. The turnover generated in conducting regular business activity shall be taken into account when calculating the turnover of banks and other financial institutions. Regarding insurance companies, the turnover thresholds shall be calculated on the basis of the value of gross premiums.
2.5 Does merger control apply in the absence of a substantive overlap?
Yes, Macedonian merger control rules apply also in the absence of a substantive overlap. Provided that the jurisdictional thresholds are exceeded, a concentration has to be notified even where the merger does not raise any competition concerns.
2.6 In what circumstances is it likely that transactions between parties outside Macedonia ("foreign to foreign" transactions) would be caught by your merger control legislation?
Foreign-to-foreign mergers are subject to Macedonian merger control rules, provided that the jurisdictional thresholds are met. The Commission has not yet adopted any guidelines which would exempt certain foreign-to-foreign mergers and has not expressly recognised the domestic effect doctrine, although there is a place holder in the LPC providing that the LPC applies to all forms of prevention, restriction or distortion of competition that produce effects on the territory of the Republic of Macedonia even when they result from acts or actions carried out or undertaken outside of the territory of the Republic of Macedonia.
2.7 Please describe any mechanisms whereby the operation of the jurisdictional thresholds may be overridden by other provisions.
Please note that direct or indirect acquisitions of certain shareholdings in banks, insurance companies, media or broadcasting sectors, in principle, require approvals of the competent regulatory authorities irrespective of the aggregate turnovers of the undertakings concerned. We further note that a takeover bid for a Macedonian joint stock company pursuant to the takeovers act has to be notified even if the thresholds are not met.
2.8 Where a merger takes place in stages, what principles are applied in order to identify whether the various stages constitute a single transaction or a series of transactions?
If the acquisition of the target company is performed in several stages – the notification obligation is triggered at the moment of acquisition of the share that allows the acquirer to exercise decisive influence over the target's business activities, i.e. when an acquirer has established the control over the target. Prior, as well as subsequent acquisitions of shares in the same target, do not trigger (additional) filing obligation(s).
Two or more concentrations between identical undertakings realised in the period of less than two years shall be deemed as one concentration that occurred on the date of the last of such consecutive concentrations.
3 Notification and its Impact on the Transaction Timetable
3.1 Where the jurisdictional thresholds are met, is notification compulsory and is there a deadline for notification?
Notification is compulsory whenever the jurisdictional thresholds are met. A concentration has to be notified prior to the implementation of the transaction and following: (i) the conclusion of an agreement; (ii) announcing the public bid; or (iii) the acquisition of control. However, in contrast to neighbouring countries, there is no filing deadline in Macedonia. On the other hand, notifications can be submitted as soon as the parties are able to demonstrate their good-faith intention to enter into a transaction agreement or, in the case of a public bid, when the intention of participation has been publicly stated, if such an agreement or public bid would result in a concentration.
3.2 Please describe any exceptions where, even though the jurisdictional thresholds are met, clearance is not required.
The following exceptions from the requirement of obtaining merger control clearance apply. A concentration does not have to be notified if:
- a bank, an insurance company or another financial institution whose business activity includes the trading with securities, temporarily acquires shares for the subsequent resale within a period of 12 months (with a possible extension if justified) provided that during this period, the shareholders' rights are not used to influence the market conduct of the respective undertaking;
- a person acting as a bankruptcy receiver acquirers control over an undertaking; or
- an investment fund acquires shares provided that its shareholders' rights are used only for the maintaining of its investment and not to influence the business conduct of the respective undertaking on the market.
We note that direct or indirect acquisitions of certain shareholdings in banks, insurance companies, media or broadcasting sectors in principle require approvals of the competent regulatory authorities irrespective of the notification to the Commission and the aggregate turnovers of the undertakings concerned.
We further note also that a takeover bid for a joint stock company registered in Macedonia pursuant to the takeover act has to be notified to the Commission even if the thresholds are not met.
3.3 Where a merger technically requires notification and clearance, what are the risks of not filing? Are there any formal sanctions?
Undertakings concerned are under an obligation to notify the Commission of a transaction and to suspend the implementation of the transaction until clearance is issued or until the waiting period of 25 to 35 days (phase I) or 90 days (phase II) has expired. Implementation of a concentration without prior clearance may lead to fines of up to 10% of the total annual turnover realised by the undertakings concerned in the last business year. However, the Commission may also impose fines on the responsible person within the undertakings concerned ranging from EUR 2,000 to EUR 10,000. The Commission is further entitled to prohibit an undertaking or a responsible person within an undertaking to perform certain business activities. In addition, the transaction agreement relating to the acquisition of interest in the target company (and all measures bringing about the transaction) may be declared null and void. The Commission may impose any measure it deems necessary to restore effective competition including the unwinding of a transaction or the obligation on the parties to divest assets.
3.4 Is it possible to carve out local completion of a merger to avoid delaying global completion?
Hold separate agreements have not yet been tested with the Commission. It is likely that the Commission will initially take a conservative approach to such carve-out mechanisms. One of the carve-out structures that might be permitted under the Macedonian competition rules is to make use of the financial institution exception (see question 3.2 above).
3.5 At what stage in the transaction timetable can the notification be filed?
A concentration has to be notified prior to the implementation of the transaction and following: (i) the conclusion of an agreement; (ii) announcing the public bid; or (iii) the acquisition of control interest. However, the LPC fails to provide filing deadlines. An undertaking may notify the Commission of the concentration based on a serious intent to conclude an agreement, or if it has made public its intention to participate in the bidding procedure.
3.6 What is the timeframe for scrutiny of the merger by the merger authority? What are the main stages in the regulatory process? Can the timeframe be suspended by the authority?
The Commission shall adopt one of the following decisions within 25 working days following the submission of a complete notification: (i) determine that the concentration does not fall within the ambit of the LPC; (ii) determine that the concentration does not significantly prevent, restrict or distort competition and therefore it is in compliance with the LPC; or (iii) determine that an in-depth assessment of the concentration (in so-called investigation proceedings) is opened as the concentration may significantly prevent, restrict or distort competition. The Commission may clear a transaction in fast-track proceedings also subject to conditions. To this end, the 25-working day deadline can be extended by 10 working days.
Within 90 working days from the day of initiating proceedings, the Commission is obliged to either clear (conditionally or unconditionally) or prohibit the transaction. This deadline can be extended to 105 working days.
All above-mentioned deadlines can be extended for up to additional 20 working days by the Commission in agreement with the participants in the concentration.
However, the statutory deadlines shall not be binding on the Commission when the Commission, as a result of circumstances for which one of the participants is responsible, has to (i) request ex officio data about participants' economic-financial standing, their business relations, the data regarding their statutes and decisions, and the number and identity of the persons affected by such decisions, as well as other necessary data, or (ii) to conduct inspections and collect evidence on site.
If the Commission did not make any decision within the specified deadlines, the concentration shall be considered to be compliant with the provisions of the LPC.
3.7 Is there any prohibition on completing the transaction before clearance is received or any compulsory waiting period has ended? What are the risks in completing before clearance is received?
Undertakings concerned are under an obligation to notify the Commission of a transaction and to suspend the implementation of the transaction until clearance is issued or until the waiting period of (phase I) or (phase II) has expired. Implementation of a concentration without prior clearance may lead to fines of up to 10% of the total annual turnover realised by the undertakings concerned in the last business year. The Commission is further entitled to prohibit an undertaking or a responsible person within an undertaking to perform certain business activities. In addition, the transaction agreement relating to the acquisition of interest in the target company (and all measures bringing about the transaction) may be declared null and void. The Commission may impose any measure it deems necessary to restore effective competition including the unwinding of a transaction or the obligation on the parties to divest assets.
However, the suspension obligation shall not prevent the implementation of a public bid for purchase of securities or series of transactions in securities, including those convertible into other securities admitted to trading on a market in accordance with the law, if: (i) the concentration has been notified to the Commission without delay; (ii) the acquirer of securities does not exercise the voting rights attached to the securities in question, or does so only to the extent which is necessary to maintain the full value of its investment; and (iii) based on a procedural order for exemption from the obligation of suspension.
When deciding upon a reasoned request for exemption from the suspension obligation, which is an independent tool allowing for exemption from the suspension obligation in general, the Commission shall, inter alia, take into account the effects of the suspension of the concentration on one or more undertakings concerned or on third parties, as well as possible adverse effects on competition caused by the concentration. This exemption may be subject to conditions and obligations in order to ensure effective competition. The exemption may be applied for and granted at any time. LPC was amended at the end of 2011. This Amendment relates to the procedural aspects of deciding on the request for an exemption of the suspension obligation. The amendment specifies, in detail, the entire procedure for processing this request, including the exact deadlines for decision-making and introduces control of other state bodies over the efficiency of the Commission.
3.8 Where notification is required, is there a prescribed format?
Besides the LPC, the format and substance of a merger notification is governed by the Ordinance on the content of the merger notification adopted in 2012. The most important change this ordinance has introduced is that it splits the "relevant data" of a merger notification into two categories: (i) one set of data/docs must be provided in the filing; while (ii) the second one may, but does not necessarily have to be provided. Further, the new ordinance significantly broadens the scope of the notification by including new categories.
The notification and all appendices shall be submitted in Macedonian or with a translation by a sworn court interpreter. In general, the Commission proved to be flexible in practice regarding the formalities in filing the supplement documentation to the merger notification.
3.9 Is there a short form or accelerated procedure for any types of mergers? Are there any informal ways in which the clearance timetable can be speeded up?
No. There is only one filing form and – other than clearance in phase I (or so-called fast track proceedings) – no accelerated procedure is attainable or usually informally provided. In 2012, the Commission issued Guidelines for determining the cases in which the Commission may issue summary (phase I) decisions. The examples of cases when clearance can be afforded in phase I include transactions such as: acquisition of the joint control over a company generating less than 1 million in Macedonia; no overlaps in the product market; joint market shares less than 15%; joint market shares less than 25% in upstream/downstream market; and one party acquires individual control over a company which it used to jointly control. For these cases the Commission would not extensively scrutinise the transaction and the clearance is expected within the fast track proceedings.
3.10 Who is responsible for making the notification and are there any filing fees?
The amount of the clearance and notification fees are regulated by the Law on Administrative Fees (Official Gazette of RM nos. 25/96, 10/09, 21/01, 4/03, 30/04, 13/04, 7/05, 6/06, 24/07, 16/08 ,15/08,) which provides for a filing fee of EUR 100 and a clearance fee of cca. EUR 500. Evidence of the paid filing fee shall be submitted together with the notification. The clearance fee shall be paid within 8 days following the adoption of the clearance decision.
Responsibility for filing:
- In case of merger of undertakings or parts of undertakings: the undertakings being participants in the merger.
- In case of purchase of securities or property: the person acquiring majority shares or parts or majority voting rights.
- In case of acquiring control or decisive influence over undertakings on any other manner: the person acquiring control or decisive influence.
- In case of acquiring control or decisive influence on the basis of a public bid: the bidder.
- In case of creation of a joint venture: either all the participants in the process of creation of joint venture submitting a joint notification or the participant authorised by the other participants as their joint representative.
3.11 What impact, if any, do rules governing a public offer for a listed business have on the merger control clearance process in such cases?
The LPC designates different treatment of concentrations of listed business in two respects. Firstly, takeover bids for joint stock companies with registered seat in Macedonia require notification to the Commission irrespective of whether any of the thresholds are met.
Secondly, the LCP specifies that suspension obligation shall not prevent the implementation of a public bid for purchase of securities or series of transactions in securities, including those convertible into other securities admitted to trading on a market in accordance with the law, if: (i) the concentration has been notified to the Commission without delay; (ii) the acquirer of securities does not exercise the voting rights attached to the securities in question, or does so only to the extent which is necessary to maintain the full value of its investment; and (iii) based on a procedural order for exemption from the obligation of suspension.
Finally, as a general rule, a concentration has to be notified prior to the implementation of the transaction and following the announcement the public bid.
3.12 Will the notification be published?
Summary of the notification is published on the Commission's website. For more information, please see questions 4.4 and 4.6.
4 Substantive Assessment of the Merger and Outcome of the Process
4.1 What is the substantive test against which a merger will be assessed?
The Commission shall analyse concentrations against the SIEC test, i.e. whether the concentration will significantly impede effective competition in Macedonia, particularly by creating or strengthening a market dominant position. For this assessment, the following factors shall be taken into account:
- structure of the relevant market;
- existing and potential competitors;
- supplies and possibility of market entries;
- costs, risks, technological, economic and legal conditions associated with market entry and exits;
- effects that the concentration may have on competitors;
- market position of undertakings involved in the concentration and their economic and financial power;
- benefits of the undertaking concerned from the transaction under consideration;
- possible changes in the behaviour of the undertakings concerned prompted by the notified concentration; and
- benefits for consumers caused by the transaction (decrease in prices of goods and/or services, increase of the efficiency of the distribution, production specialisation, and any other benefits arising from the concentration).
4.2 To what extent are efficiency considerations taken into account?
The Ordinance on the content of the merger notification requires the applicat to elaborate on the efficiency considerations of the notified transaction. Namely, the analysis of: the expected consumer benefits (prices reduction, increase of quality, innovation, etc.); planned research and investment into the development; and strategic and economic reasons for the concentration, are all mandatory parts of the merger notification. The analysis of these efficiency considerations is usually taken into account by the Commission when assessing and clearing a proposed concentration. Moreover, these issues are in some cases elaborated in the Commission's decisions.
4.3 Are non-competition issues taken into account in assessing the merger?
The primary task of the Commission is to assess whether the proposed concentration significantly prevents, restricts or distorts the competition, and whether it is therefore in compliance with the LPC. Consequently, the Commission will, as a rule, consider and elaborate solely competition issues in its decision making process.
4.4 What is the scope for the involvement of third parties (or complainants) in the regulatory scrutiny process?
Decisions rendered by the Commission and rulings of the courts shall be published in the Official Gazette of the Republic of Macedonia and on the web page of the Commission. The published text shall include the names of the parties and the main content of the decision. According to Article 67 LPC, the Commission is also obliged to publish certain information on all notified filings on its website. Such information shall include the names of the parties, the country of origin, the form of concentration and the relevant market. These publicity requirements allow third parties to be informed on the development of the proceedings, and to submit their comments, opinions and remarks regarding the concentration under consideration.
In case damage is caused by any action prohibited by the provisions of the LPC, the person that suffered the damage may lodge a damage claim in accordance with the law.
4.5 What information gathering powers does the regulator enjoy in relation to the scrutiny of a merger?
The Commission has various investigative powers. The Commission is entitled to: request certain documentation or statements from the parties; request witnesses and experts; issue interim measures; and hold hearings. In order to vest the Commission with the appropriate tools for public enforcement of competition rules, the LPC sets out explicitly that the Commission may conduct inspections of an undertaking's premises, review, seize, copy or scan business records, seal all premises and documentation (for a period not longer than 7 days) and take statements from any responsible persons, including employees. The Commission shall collect all necessary data by passing a decision against which an appeal shall not be allowed. The person requested to submit data shall be obliged to submit the requested data and the data must be correct, complete and true and must be submitted within the specified time limit.
4.6 During the regulatory process, what provision is there for the protection of commercially sensitive information?
Article 7 of the Implementing Ordinance provides for the possibility of an applicant requesting that certain information submitted to the Commission is treated as confidential. Such information cannot be disclosed or published. The LPC imposes an obligation on the Commission's personnel to keep all data determined as a business or professional secret by the law or marked as such by the parties, as confidential. The personnel are bound by this duty to keep confidential also for five years upon the termination of their working relation with the Commission. Regarding the information which is claimed by the parties to be confidential, the Commission shall have the right to accept or refuse such claims. It will accept the claim if such data has economic or market value and their discovery or use may lead to economic disadvantages of the undertakings concerned. The relevant procedure is governed by the Guidelines on the manner of preparing of a non-confidential version of a Commission decision.
5 The End of the Process: Remedies, Appeals and Enforcement
5.1 How does the regulatory process end?
The Commission may:
- clear the concentration, either unconditionally or subject to restrictions and/or obligations;
- prohibit the merger;
- decide that the transaction does not constitute a notifiable event pursuant to the LPC; or
- cease the procedure whenever the notification is withdrawn.
5.2 Where competition problems are identified, is it possible to negotiate "remedies" which are acceptable to the parties?
In 2009, the Commission adopted Guidelines on remedies acceptable to the Commission under Chapter III of the 2005 LPC on the Control of Concentrations ("Guidelines on Remedies"). Please note that the Guidelines on Remedies were adopted before the new LPC entered into force. Pursuant to the LPC's transitional provisions, existing by-laws shall remain in force until they are replaced by new ones.
When competition concerns are identified, the Commission informs the parties that it intends to prohibit the merger, since it will significantly prevent, restrict or distort the competition. The parties are then expected to propose remedies to the Commission in order to overcome those problems. Should the Commission find that proposed remedies do not obviously eliminate identified problems, it will deliver a Conclusion for the initiation of a procedure ("Conclusion").
Within 65 working days from the day of receipt of the Conclusion, the parties have to submit a proposal of remedies to the Commission. Such remedies could include divestment of business, elimination of connections with their competitors, facilitating access to a market, amendments of long-term exclusive agreements, alternative divestment commitments, etc. The Commission shall analyse and negotiate proposed remedies, but it will not propose remedies itself. Parties may consult the Commission and third parties, and they may submit additional proposals referring to the remedies and their implementation within those 65 days.
If at the end of the procedure, the Commission finds that parties did not propose valid remedies which will eliminate competition concerns, the Commission will prohibit the concentration. Should the Commission find that proposed remedies are adequate, it will issue a conditional clearance.
5.3 To what extent have remedies been imposed in foreign-to-foreign mergers?
To the best of our knowledge, the practice of the Commission has not, as of yet, developed in this regard, and so far, there has not been any imposition of the remedies in foreign-to-foreign mergers.
5.4 At what stage in the process can the negotiation of remedies be commenced? Please describe any relevant procedural steps and deadlines.
Please see question 5.2 above.
5.5 If a divestment remedy is required, does the merger authority have a standard approach to the terms and conditions to be applied to the divestment?
If participants to the concentration choose to propose divestment of business, the following terms and conditions set by the Guidelines on Remedies apply: divested business has to be described in detail specifying all tangible and intangible assets: relevant personnel; customer lists; licences; permissions; agreements; and loans, etc. It has to be a viable and competitive entity. The Commission prefers the divestment of an existing business entity or unit that has already demonstrated its ability to compete in the relevant markets. Participants to the concentration should be prohibited from regaining control on entire or part of the divested business for a certain period of time (usually 10 years). In addition, divested business should be sold to an acceptable buyer, in particular, to the one who has enough financial resources, who is independent of the participants to the concentration and whose purchase of divested business shall not raise any other competition issues.
In certain cases, the implementation of original divestment remedy may be uncertain, because the sellers might not be unable to divest proposed business to an acceptable buyer within the foreseen deadline. For that reason, the Commission accepts the proposal of alternative divestment remedies referred to as "crown-jewels". Crown jewels may be an upgrade on the original business or another more attractive business, and its implementation must not be uncertain and lengthy. It is important that the alternative proposal is "at least equal, if not better suited" to restoring effective competition as the original remedy.
5.6 Can the parties complete the merger before the remedies have been complied with?
Generally, parties may complete the merger before a remedy has been complied with, however, this will depend on the nature of the remedy and negotiations conducted with the Commission. Similar to the European Commission, the Macedonian Commission may, however, request that the parties shall not implement the merger before they have complied with the divestment. An example for this would be an 'upfront buyer' requirement, where the parties have to present to the Commission an agreement with a purchaser for the divested business before they implement the transaction.
5.7 How are any negotiated remedies enforced?
The parties are obliged to act in accordance with the Commission's decision. Pursuant to Article 19 of the LPC, the Commission may approve the transaction conditionally. A clearance decision shall be revoked and the transaction assessed anew if parties fail to comply with remedies. In addition, the Commission may impose fines of up to 10% of the annual turnover of the undertakings concerned and determine interim measures if the parties do not observe the remedies imposed on them.
5.8 Will a clearance decision cover ancillary restrictions?
The new LPC expressly provides that a decision whereby the Commission determines that a particular concentration is in compliance with the provisions of the LPC shall also be considered to cover the restrictions which are directly related and indispensable for the implementation of the concentration.
5.9 Can a decision on merger clearance be appealed?
Merger control decisions of the Commission can be challenged before the Administrative Court of Macedonia. The complaint has to be submitted within a period of 30 days from the day of receiving the decision. The complaint does not hold up the execution of the decisions. The duration of administrative proceeding is uncertain. The Competition Act does not set out the persons who can lodge the claim against the final decision of the Commission. According to the Law on Administrative Disputes, the following persons are entitled to lodge an appeal: (i) the parties to the transaction; (ii) an interested third party or public body if it can be the holder of any right deriving from the decision; and (iii) the competent authority in case that the decision infringes the law.
5.10 What is the time limit for any appeal?
Please see question 5.9.
5.11 Is there a time limit for enforcement of merger control legislation?
The limitation period for imposing a fine for a breach of the bar on closing is five years, whereas the period is three years for notifyingthe transaction based on false and/or inaccurate data. The limitationperiod for enforcing a fine decision is two years following the datethat the decision becomes legally binding.
6.1 To what extent does the merger authority in Macedonia liaise with those in other jurisdictions?
The Commission is a member of the International Competition Network and it participates in the OECD Competition Committee. The Commission cooperates with the Competition Directorate General of the EU Commission, as well as with foreign competition authorities which include the German Bundeskartellamt and competition authorities in Bulgaria, Croatia, Bosnia and Herzegovina and Albania.
The Commission has signed a Memorandum of Understanding with the following Macedonian authorities in 2007: the Energy Regulatory Commission; the Agency for Electronic Communications; the Public Procurement Authority; and the Broadcasting Council. The memorandums address the cooperation between the Commission and these authorities in respect of protecting, promoting and developing competition on the Macedonian market.
6.2 Are there any proposals for reform of the merger control regime in Macedonia?
In 2012, the merger control regime has been somewhat reformed with the interdiction of new regulation and by-laws clarifying certain aspects of the clearance process. Namely, the LPC was recently changed by an amendment issued at the end of 2011. Further, in March 2012, the Macedonian Government adopted a new Ordinance on the content of the merger notification. Also, new Guidelines for determining the cases in which when assessing concentrations the Commission for the Protection of Competition may issue summary decisions were issued in June 2012.
6.3 Please identify the date as at which your answers are up to date
6 September 2012.
This article appeared in the 2013 edition of The International Comparative Legal Guide to: Merger Control; published by Global Legal Group Ltd, London. Online: www.iclg.co.uk.
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