Relevant legislation and statutory standards

Merger Control in the US is governed at the federal level primarily by Sections 7 and 7A of the Clayton Act. The first federal attempt to address anti-competitive conduct by competing firms was the Sherman Act in 1890, which prohibits, among other things, certain contracts, combinations and conspiracies between or among competitors in restraint of trade. However, the Sherman Act proved inadequate to deal with the competitive consequences of mergers and acquisitions, and in 1950 Congress amended the Clayton Act of 1914 to better cope with such transactions.

One of the Sherman Act’s weaknesses lay in its inability to prohibit combinations, such as mergers, in which the competitive harm was uncertain. Thus Section 7, the heart of the Clayton Act’s merger control provision, prohibits those transactions ‘where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such an acquisition … may be substantially to lessen competition, or to tend to create a monopoly’.

The Clayton Act was further amended in 1976 by the Hart-Scott-Rodino Antitrust Improvements Act (‘the HSR Act’), to require pre-merger notification of certain mergers and acquisitions of voting securities and assets (the HSR Act is also known as Section 7A of the Clayton Act).

Merger control requirements in India are currently governed by the provisions of the Companies Act 1956 (‘the Companies Act’). The Competition Act 2002, as amended by the Competition (Amendment) Act 2007 (‘the Competition Act’) provides for regulation of combinations. However, the provisions for regulation of combinations have not come into force as yet. Once the provisions relating to combinations under the Competition Act are enforced, such provisions will predominantly govern combinations.

Competition Act

The Competition Act was enacted in 2002, inter alia, with a view to preventing practices having adverse effects on competition, to promoting and sustaining competition in markets, to protecting the interests of consumers and to ensure freedom of trade carried on by other participants in markets. The Competition Act received the assent of the President of India on 13 January 2003. Even though the provisions relating to anti-competitive agreements and abuse of dominant position, which are contained in the Competition Act, have been enforced with effect from 20 May 2009 and the Competition Commission of India (CCI), which is the regulator under the Competition Act, has become functional, the provisions relating to combinations under the Competition Act have not come into force as yet. The enforcement of the Competition Act got delayed because of public interest litigation before the Supreme Court of India and the Competition Act 2007 had to undergo an amendment in the year 2007.

Relevant legislation and statutory standards

Malta had its first ad hoc merger control legislation in 2003 with the promulgation of the Control of Concentrations Regulations in 2002, which entered into force on 1 January 2003. Prior to that date, the government agency responsible for competition law enforcement, the Office for Fair Competition, had attempted to curb anti-competitive mergers and acquisitions through the application of the general provisions of the antitrust statute, the Competition Act, in particular through the provisions prohibiting collusive practices and abusive conduct that are modelled on Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

Several undertakings had actually sought clearance from the Office before concluding a merger or acquisition because Article 10 of the Competition Act had obliged undertakings to seek negative clearance from the Office if they believed, or reasonably ought to have believed, that an agreement or concerted practice or conduct might have fallen within the prohibition. However, in most cases the provisions of the Act were found to be inadequate tools for proper merger control either because the concentration could not be classified as an ‘agreement’ or ‘concerted practice’ or because, as happened in the Supermarkets Concentration case, the acquiring firm was not in a dominant position prior to the merger but would have acquired dominance only as a result of the merger. Indeed, in that case, the Commission for Fair Trading, the independent tribunal entrusted with the adjudication of serious competition-related infringements, strongly advocated the promulgation of ad hoc merger regulations to address this lacuna.

Turkey’s system of competition law has been updated since the mid-1990s, perhaps mainly as a consequence of the ties Turkey has been forging with the European Union (EU) and the country’s ambition to be admitted as a member state of the Union. The ongoing modernisation efforts of Turkey’s competition watchdog are also intended to address the needs of a changing economic environment, to reduce the burden on the Competition Authority which resulted from the bureaucratic notification system and to focus on more serious competition issues.

Relevant legislation and statutory standards

The principal legislation for merger control in Turkey is the Law on the Protection of Competition (Law No 4054) dated 1994 (‘the LPC 1994’ or ‘the Law’). The LPC 1994 prohibits, among other things, ‘all kinds of operations and practices which are considered to be a merger or an acquisition’ which result in the creation or strengthening of a dominant position and significantly impede competition in the relevant market.

Free competition is regulated in Greece by the provisions of Law 703/1977 on the control of monopolies and oligopolies and the protection of free competition, as amended and currently in force (‘Law 703/77’). Initially, Law 703/77 did not contain specific merger control rules and Article 4 of the law, as applicable at the time, merely stated that these transactions were not considered to fall within the ambit of the provisions on restrictive trade practices and abuse of dominance (Articles 1 and 2 of Law 703/77 which are, in essence, a reiteration of Articles 101 and 102 – former Articles 81 and 82 – of the Treaty on the Functioning of the European Union (TFEU), respectively).

In the beginning of the 1990s, with the development of EU merger control rules, detailed provisions on concentrations were introduced into Law 703/77 by virtue of Law 1934/1991. These were subsequently amended on a number of occasions to take into account the evolution of market trends and conditions.

Currently, Law 703/77 provides for the pre-merger notification of concentrations which meet the statutory turnover requirements set by the law (Article 4b) and establishes the procedure for the review of these transactions by the Greek Competition Commission (GCC) as well as by the competent ministers or appellate administrative courts, as the case may be.

The Republic of Tunisia can be regarded as a leader and a pioneer in the field of competition law in the Arabic world. Indeed, it is the only Arab country with a working system of competition law. Tunisia’s clear commitment to building a strong competition law and policy is but one aspect of a broader economic transition, in the wake of its structural adjustment agreement with the World Bank and International Monetary Fund in 1986 and subsequent accession to the World Trade Organization (WTO) and trade agreement with the European Union, from a highly controlled and regulated economy towards a market economy. Although the Tunisian system of competition law and its merger control regime remain in their infancy, they are serving increasingly as a source for consultation by several countries in the region.

Relevant legislation and statutory standards

The relevant legislation for merger control in Tunisia is the Loi N° 92–64 du 29 Juillet 1991 Relative à la Concurrence et aux Prix, telle que modifiée et complétée par la Loi N° 93–83 du 26 Juillet 1993 la Loi N° 95–42 du 24 Avril 1995 et la Loi N° 99/41 du 10 Mai 1999, or the Law No 92–64 of 29 July 1991 on Competition and Prices, as amended in 1993, 1995 and, more recently, 1999 (‘the Law’). The original Law on Competition and Prices was modelled extensively on the French 1986 ordinance, and the merger control aspect did not enter into force until the 1995 amendment.

Relevant legislation and statutory standards

Chapter 4 of the Act Concerning the Prohibition of Private Monopolisation and Maintenance of Fair Trade as amended as of 1 January 2010, commonly called the Antimonopoly Law (the AML), contains provisions for the control of mergers and acquisitions, for example Articles 9 to 18.

Those provisions can be classified into three parts. The first group consists of Articles 9 and 11, which provide for the control of the general concentration of economic power. The second group consists of Articles 10, 13, 14, 15, 15-2, 15-3 and 16, which control the specific concentration of economic power that tends substantially to restrain competition in a particular field of trade as opposed to the general concentration of economic power. Article 17 prohibits evasion of the above articles. Article 17-2 provides for remedies and Article 18 states that the Fair Trade Commission of Japan (the JFTC) may bring proceedings to nullify a merger, company split involving the business combination and joint-stock transfer involving the business combination under certain circumstances.

New Law on the Protection of Competition

As of 1 November 2009 a new Law on the Protection of Competition (LPC) regulates the merger control regime in Serbia. The LPC replaces the Competition Protection Law (CPL) of 2005. Although the LPC has introduced some novelties into Serbian law, the general framework for competition protection established under the CPL has been maintained. One of the most significant changes regards the powers of the Commission for the Protection of Competition (Komisija za zaštitu konkurencije) (‘the Commission’). Under the LPC, the Commission has full powers over the merger control regime. This includes the competence to assess a concentration, monitor markets and impose sanctions.

Secondary legislation

Since the implementation of the CPL, two regulations regarding merger control have been adopted by the Serbian Parliament:

• the Regulation on the Form and Manner of Filing a Concentration Approval Request, and

• the Regulation on the Criteria for Determining the Relevant Market.

In order to assist the application of the LPC, the Serbian government is adopting the necessary secondary legislation, including a Regulation on Block Exemptions. The draft Regulation on Block Exemptions is, in general, modelled after Regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to vertical agreements and concerted practices.

Merger control has received special attention in Israel in recent years. The Israeli Antitrust Authority (IAA) – the main body in charge of enforcing the competition rules of Israel – has made considerable efforts since the end of the 1990s to improve its merger control practice and procedure. The IAA increasingly consults the experience of other competition authorities around the word in the field of merger control to learn from procedures and relevant data gathering practices used by disparate regimes. In addition, the IAA has been an active participant in the International Competition Network (ICN) and headed at some stage its subgroup on investigative techniques in mergers.

Israeli merger control regime, however, still suffers from certain shortcomings, and there is a general lack of adequate merger control expertise in practice. Indeed, very few practitioners truly understand the regime and how it operates. On the other hand, a growing number of courts decisions were handed down in recent years which have clarified some aspects of the law in that area.

Relevant legislation and statutory standards

Spanish Merger Control legislation is set out in the Law for the Defence of Competition 2007 (‘the LDC’), which came into effect on 1 September 2007, and in Royal Decree 261/2008 of 22 February 2008 (‘the Royal Decree’).

By way of exception to the procedures outlined in the LDC and the Royal Decree, procedures specific to public offers for shares are set out in Article 26 of Royal Decree 1066/2007 (‘the Public Offer Decree’).

In addition to merger control legislation as such, the energy and telecommunications sectors are also subject to speciic legislation as explained in section 8 below.

Decision-making bodies and enforcement authorities

The sole decision-making body is the National Competition Commission (Comisión Nacional de la Competencia, or CNC), although cases resulting in the prohibition of transactions or the imposition of conditions can be reviewed by the Minister of the Economy (‘the Minister’) and by Government (the Consejo de Ministros or Council of Ministers), on certain public-interest grounds.

The free market underpinnings of substantive competition law and practice and organised enforcement of competitive behaviour in the Republic of Indonesia are still under development. Unlike other developed jurisdictions, which have a long tradition of antitrust laws, competition law in Indonesia is relatively new, having been introduced by the enactment of the Competition Law in 1999 (‘the Law’).

Since its introduction 5 years ago, the Business Competition Supervisory Commission (‘the KPPU’) has made many decisions in an attempt to enforce the Law, stimulate the competitive climate for economic and business activities in Indonesia and eliminate the monopolistic and unfair business practices which predominantly prevailed in the business environment prior to the enactment of the Law.

It should be noted at the outset that, although anti-competitive agreements and behaviour are currently regulated, and administrative and civil actions have been effected against parties infringing the provisions of the law, there has at the time of writing been no enforcement of the merger control provisions. Moreover, owing to the absence of certain implementing provisions discussed further in Section 3.1. below, it can generally be concluded that the merger control provisions in Indonesia are not yet in force.