The Saeima (Parliament) of Latvia is reviewing the new Competition Law bill, which is to replace the existing competition legislation. Among other things, the new law will widen the range of market players required to notify the Competition Council of their decision to merge.
The bill states that a merger of market players involves:
- the merging of two or more independent market players in order to become one market player;
- the joining of one market player to another market player; or
- the acquisition by one or more market players of decisive influence over another market player or players.
If market players decide to merge in one of the above ways, they must notify the regulatory authorities of their decision. However, this obligation to notify rests only with market players that meet certain specific criteria.
The term 'market player' denotes any natural or legal person, or partnership, which undertakes or is preparing to undertake a business activity within the territory of Latvia, irrespective of the form of such activity. If one or more market players jointly have a decisive influence over another market player, then under the new law they will all be considered collectively as one market player. Foreign natural or legal persons who directly supply services or sell goods within the territory of Latvia can also be considered as market players within the meaning of the new law.
The existing legislation in Latvia states that market players which decide to merge must give prior notice to the regulatory authorities if (i) the total turnover of the merger participants in the preceding financial year was not less than Lats25 million, and (ii) at least one of the participants enjoys a dominant position in the relevant market. If one of these criteria is not met, there is no need to notify the regulatory authorities of the merger.
However, under the new bill the notification requirement will apply if either of the above conditions is met. The new bill would thus greatly expand the range of mergers for which the merger plans must be evaluated by the government regulator.
The new bill strictly specifies that any merger to which the notification requirement applies shall be illegal and shall not be recorded in the Register of Enterprises if it is effected before the Competition Council has delivered its decision in respect of such merger.
It is expected that the new bill will be adopted this autumn.
For further information on this topic please contact Filip Klavins or Sanda Lace at Klavins & Slaidins by telephone (+371 703 5222) or by fax (+371 703 5252) or by email ([email protected] or [email protected]).
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