Merger Controls First Edition - J Sagar Associates

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Lenz & Staehelin Switzerland practice it was going to follow concerning the definition of affected markets under the merger control rules 7 . As a matter of principle, and pursuant to Swiss merger control rules, a market is deemed to be affected if (i) the accumulated market shares of the participating undertakings (in the broad sense as defined in Article 5 of the Ordinance on the Control of Undertaking Concentrations [“OCUC”]) represent at least 20% of the concerned markets, or (ii) one of the involved undertakings holds a market share of at least 30%, irrespective of any vertical overlap. The rule that applies to the individual market share’s threshold has for the first time been narrowed in scope by the Comco’s practice in 2009 and has recently been confirmed in the newest version of its Communication concerning the New Merger Practice (issued on 3 May 2011). As from now, in the absence of horizontal overlaps and if the 30% individual market shares threshold is met, a market will only be deemed to be affected in the following cases: • if the other party is active in a market that is closely linked to such 30% market; • if it intends to enter the 30% market in the near future or has tried to enter that market in the past two years; • if it owns intellectual property rights in that 30% market; or • if it is active in the 30% market, but in a different relevant geographic market. Reform proposals A possible partial revision of the CartA is currently being discussed. This revision is organised around two main categories of changes: (i) changes affecting the organisation of the competition authorities, as well as the procedure to be followed (for which the first consultation procedure ended on 19 November 2010); and (ii) changes relating to the administrative and criminal penalties (for which the second consultation ended on 6 July 2011). From a general point of view, the first category of changes aims essentially to reinforce the powers of the competition authorities in Switzerland, in particular by creating a “Competition Authority” that would be competent for all investigations in relation to competition law violations. The second category of changes concerns the reduction of administrative penalties for undertakings that have internal compliance systems, as well as the implementation of criminal sanctions for individuals who participated to illegal agreements. Concerning merger control, the partial revision of the CartA aims at reinforcing and simplifying the procedure. According to the explaining report from the Federal Council, the following changes are currently being envisaged8 : The administrative procedure would be simplified, in particular by avoiding duplicating investigation measures taken in Switzerland and in other countries for the same concentration: If a concentration must already be notified in the EU, the requirements in Switzerland should be much lighter. In particular, it is contemplated that a merger (i) for which the relevant geographical market includes Switzerland and at least the European Economic Area, and (ii) which is already subject to the merger control of the EC Commission would no longer have to be notified in Switzerland. In our view, this measure would be very difficult to implement in practice, in particular in relation to the definition of the markets that would have to be made by the parties themselves. Moreover, the fact that the relevant geographical market is European-wide does not exclude important market shares in Switzerland and, therefore, a clear interest of the Comco to examine the concentration. The assessment criteria would be hardened in order to avoid concentrations that do not benefit the market: Two variants are being examined in order to harden the assessment criteria that are used when analysing the effects of a concentration: • The first variant would lead to the SIEC test being applied in Switzerland and, therefore, to harmonising the applicable legal rules with European law. • The second variant would consist in keeping only one of the two assessment criteria that are applied today (i.e. the creation or strengthening of a dominant position and the fact for the latter is likely to eliminate effective competition). In such a case, a concentration could be forbidden (or allowed with conditions and/or obligations) based solely on the fact it creates or strengthens a dominant position. The second criteria would therefore be abandoned. The time-limits and procedures would be modified in order to be identical to the ones that apply under EU law. The procedure in front of the Federal Tribunal for Competition would be adapted to the requirements of merger control: The Federal Tribunal for Competition (which should be established by this revision) would in particular have to respect a three-month time-limit to take a decision following an appeal against the Comco’s decision. The consultation procedures launched by the Federal Council have now ended. The current proposed reform will be adapted according to the consultation results. Then, after a review by the Federal Council that is likely to take place end of 2011/beginning of 2012, it should in principle be submitted to the Swiss Parliament. * * * Global Legal Insights Merger Control First Edition —180— © Published and reproduced with kind permission by Global Legal Group Ltd, London www.globallegalinsights.com
Lenz & Staehelin Switzerland Endnotes 1 RPW / DPC 2010/3, p. 562, Ringier AG/Springer AG (GU osteuropäische Aktivitäten), § 6. 2 RPW / DPC 2010/3, p. 499, France Telecom SA / Sunrise Communication AG. 3 RPW / DPC 2010/4, p. 775, CVC Capital Partners SICAV-FIS SA/Sunrise Communications AG. 4 Press release of 29 April 2011. 5 Mitteilung: Neue Praxis bei Zusammenschlussverfahren, 25 March 2009. 6 Mitteilung: Neue Praxis bei Zusammenschlussverfahren, 2nd edition, 3 May 2011. 7 RPW / DPC 2009/4, p. 442, Merck & Co./Schering-Plough. 8 Explanatory report of the Federal Council, 30 June 2010, p. 21; http://www.weko.admin.ch/dokumentation/ 00216/01036/index.html?lang=fr. Global Legal Insights Merger Control First Edition —181— © Published and reproduced with kind permission by Global Legal Group Ltd, London www.globallegalinsights.com
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CONTENTS Preface Nigel Parr & Cathe
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Australia Elizabeth Avery & Gina Ca
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Gilbert + Tobin Australia In the pa
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Gilbert + Tobin Australia sectors f
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Austria Astrid AblasserNeuhuber &
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pv Hügel Rechtsanwälte Austria Ke
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Brazil Eduardo Molan Gaban Machado
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Machado Associados, Advogados e Con
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Bulgaria Peter Petrov Boyanov & Co.
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Boyanov & Co. Bulgaria The CPC’s
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Boyanov & Co. Bulgaria Peter Petrov
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Osler, Hoskin & Harcourt LLP Canada
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China Susan Ning, Huang Jing & Yin
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King & Wood PRC Lawyers China subje
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King & Wood PRC Lawyers China Artic
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King & Wood PRC Lawyers China Susan
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Esguerra Barrera Arriaga Colombia i
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Esguerra Barrera Arriaga Colombia i
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Esguerra Barrera Arriaga Colombia
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Cyprus Thomas Keane & Christina Vge
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Chrysses Demetriades & Co. LLC Cypr
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Chrysses Demetriades & Co. LLC Cypr
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White & Case LLP Czech Republic b)
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White & Case LLP Czech Republic Ivo
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Accura Advokatpartnerselskab Denmar
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Attorneys at Law Borenius Estonia N
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Attorneys at Law Borenius Estonia A
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European Union Alec Burnside & Anne
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Cadwalader, Wickersham & Taft LLP E
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Finland Petteri MetsäTokila & Le
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Krogerus Attorneys Ltd Finland the
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Linklaters LLP France proves the EU
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Linklaters LLP France franchisees)
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Linklaters LLP France control. Whil
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Linklaters LLP France Pierre Zelenk
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Clifford Chance Germany Key industr
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Clifford Chance Germany Marc Besen
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Dryllerakis & Associates Greece was
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India Farhad Sorabjee J. Sagar Asso
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J. Sagar Associates India Approach
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Ireland Helen Kelly & Bonnie Costel
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Matheson Ormsby Prentice Ireland pr
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Israel Dr. David E. Tadmor & Shai B
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Tadmor & Co. Israel The Antitrust L
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Tadmor & Co. Israel If such remedie
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Tadmor & Co. Israel Dr. David E. Ta
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Cleary Gottlieb Steen & Hamilton LL
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Page 157 and 158: Portugal Mário Marques Mendes & Pe
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Page 181 and 182: Switzerland Benoît Merkt & Marcel
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Page 211 and 212: USA J. Mark Gidley & George L. Paul
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Page 225 and 226: NOTES Global Legal Insights Merg
Page 227: Strategic partners: www.globallegal
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