Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
The deadline for filing the notification is generally described: the participants are obliged to notify the Commission before implementation of the concentration and following the conclusion of the merger agreement, or the announcement of a public bid for the purchase or acquisition of a controlling interest in the charter capital of the undertaking.
Failure to notify is a misdemeanour penalised by a fine amounting to up to 10 per cent of the value of the aggregate annual income of the undertaking made in the business year preceding the year when the misdemeanour was committed. In addition to the fine, the Commission for Misdemeanour Matters may impose to the legal person a temporary ban on the performance of specific activity in duration of three to 30 days, and to the natural person - a ban on the performance of an occupation, activity or duty in duration of three to 15 days.
The competition authority in North Macedonia has had a past track record of sanctioning the undertakings for failure to notify the concentration when the jurisdictional thresholds were met (even for foreign-to-foreign mergers).
Which parties are responsible for filing and are filing fees required?
Merging undertakings or acquirers of joint control are obliged to submit a joint notification of the concentration arising as a result of a merger or of a concentration resulting from the acquisition of a joint control.
In all other cases the notification shall be filed by a person or undertaking that acquires control of the whole or part of one or more other undertakings.
The initial filing fee is set at a fixed amount of 6,000 denars and is payable with filing. An additional fee of 30,000 denars will be charged for a decision declaring the concentration compliant with the provisions of the LPC, and is payable after the concentration has been appraised by the Commission.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
The concentration shall not be performed either before its notification to the Commission or after the submission of the notification until a decision is made declaring the concentration compliant with the LPC or before the expiry of the legal terms in which the Commission should pass the decision. This shall not prevent the implementation of a public bid for the purchase of securities or a series of securities transactions, including those convertible into other securities for the purpose of trading on the market if the concentration has been notified to the Commission without delay, and the acquirer of securities does not exercise the voting rights attached to the securities in question, or does so only to the extent that is necessary to maintain the full value of its investment and based on a Commission’s decision for exemption.
After the complete notification is received, the Commission has up to 25, or at most 145, business days, depending on the case, to pass its decision.Pre-clearance closing
What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?
If the undertakings do not comply with the suspension obligation as stipulated in article 18 of the LPC, then such undertakings are committing a serious misdemeanour and can be fined with up to 10 per cent of the value of the total annual income of the undertaking (respectively, of the group) realised in the business year preceding the year in which the concentration was performed. The total annual income is calculated under article 16 of the LPC. In addition, the Commission may impose temporary bans, as defined in question 9.
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
If the undertaking does not file a notification on concentration in cases of foreign-to-foreign mergers that fall under the provisions of the LPC, the Commission for Misdemeanour Matters shall impose a fine amounting to up to 10 per cent of the value of the aggregate annual income of the undertaking made in the business year preceding the year when the misdemeanour was committed. In addition to the fine, the Commission for Misdemeanour Matters may impose temporary bans, as defined in question 9.
The Commission for Misdemeanour Matters imposed fines in several cases involving closing before clearance in foreign-to-foreign mergers.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
All mergers (not only foreign-to-foreign) that fulfil the thresholds can apply for an exemption from the suspension obligation by submitting a justified written request, which is subject to approval by the Commission (article 18 of the LPC).
The Commission may, upon a reasoned request by the participants in a concentration, adopt a decision to allow an exemption from the obligations that the concentration shall not be performed before its notification and clearance. In deciding upon the request for exemption, the Commission shall, inter alia, take into account the effects of the suspension of the concentration on one or more undertakings concerned by the concentration or on a third party, as well the threat to the competition posed by the concentration. This exemption may be subject to imposing of conditions and obligations to ensure an effective competition. The exemption may be applied for and granted at any time, that is, prior to filing of the notification or following the transaction that refers to the public bid for the purchase of securities or a series of securities transactions, including those convertible into other securities for the purpose of trading on the market. The Commission prescribed a special form of request for exemption, regulating in general manner its content; however, details of the documents to be enclosed to the request are not provided. The decision following the request for exemption has to be issued within 15 days of the day of receipt of the complete documentation necessary to assess the request.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
There are no special merger control rules applicable to public takeover bids.Documentation
What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?
The LPC does not prescribe special form for submission of the notification. It only stipulates that the notification of the concentration must include an original of the legal act that is the basis for the creation of the concentration (or a verified transcript thereof), financial reports of the participants regarding the business year preceding the concentration (in the original or a verified transcript thereof); a certificate from the trade register or other register of legal persons containing the basic information on the undertaking, the registered office and the scope of operation of the participants (in the original or a verified transcript thereof) and data regarding the market shares of the participants, as well as the shares of their competitors. As of August 2016, the Commission ex officio obtains the financial reports and registration documents for the participants in the concentration registered in North Macedonia.
However, the Regulation on the form and content of the notification of concentration and necessary documentation that shall be submitted along with the notification sets out detailed rules with regard to the notification’s content and format (written and electronic) as well as additional enclosures. Inter alia, the notification on concentration should contain the following information: a short resume on the notification - excluding any confidential information (to be published on the Commission’s website), exact data on the participants in the concentration (name, address, business activity, annual income gained on a group level in the business year preceding the concentration - worldwide and on the North Macedonian market, calculated under article 16 of the LPC), detailed description and legal basis of the concentration, relevant markets and market shares of the participants in the concentration and their main competitors, etc.
The notification for concentration should mandatorily include a statement signed by or on behalf of the notifying party relating to the accuracy of the data, information and documents enclosed to the notification, and its awareness of the consequences of submitting false or misleading data to the Commission (in this case a misdemeanour fine could be imposed on the notifying party of up to 1 per cent of the value of its total annual turnover, calculated under article 16 of the LPC; and more important, the Commission may revoke its decision declaring that the concentration is compliant with the provisions of the LPC if it was adopted on the basis of such false or incomplete data for which one of the participants in the concentration is responsible or they were obtained by way of deceit, and they had a decisive influence when adopting the decision).
In addition to the compulsory data, the Commission may require the submission of all other data considered necessary for the evaluation of the concentration. In particular, this would take place in cases of horizontal relations (where two or more of the participants in the concentration are engaged in business activities related to the same market of goods and geographical market) or vertical relations (when one or more of the participants in the concentration are engaged in business activities on the market of goods that is upstream or downstream in relation to the market of goods in which any other participant in the concentration participates) between the participants in the concentration, provided that in cases of horizontal relations their mutual market share is higher than 15 per cent, and in cases of vertical relations their individual or mutual market shares are equal to or higher than 25 per cent.
The Guidelines for submission and filing of the notification for concentration prescribe the form and content of the introductory (first) page of the notification for concentration, which is of a very general nature. In addition, the Guidelines provide some more technical details about the form, content and technical description of the elements of the notification of concentration (all mandatory data to be provided on a separate sheet of paper, to include description of the circumstances related to the concentration, or to indicate and elaborate that such information is not relevant for the assessment of the concentration, to provide a detailed list of all enclosures, etc).Investigation phases and timetable
What are the typical steps and different phases of the investigation?
The Commission shall examine the notification once it is received, and decide:
- that the notified concentration does not fall under the provisions of the LPC;
- to declare the concentration as compliant with the provisions of the LPC if:
- it finds that the concentration notified, although falling under the provisions of the LPC, shall not have as its effect significant impediment of effective competition on the market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position (significant impediment of effective competition);
- the participants, after the notification is filed, have modified the concentration, and the Commission finds that as result of those changes the concentration shall no longer have as its effect significant impediment to effective competition; or
- to initiate an in-depth procedure if it finds that the concentration notified falls under the provisions of the LPC and may have as its effect the significant impediment of effective competition. No appeal or legal action on instituting an administrative dispute is allowed against this procedural order.
In August 2016, the Commission adopted separate Guidelines that define the cases in which it will usually declare certain concentrations compliant with the competition rules in a simplified procedure (within the term of 25 working days, as explained in question 18), aiming to make the merger control procedure more focused and effective.
During the in-depth procedure, the following steps may occur:
- the Commission may decide to adopt a decision declaring that the concentration is compliant with the provisions of the LPC, if after the notification is filed or after the performed concentration modifications by its participants, the Commission finds that the concentration shall not have as its effect significant impediment of effective competition;
- the participants in the concentration may enter into commitments with the Commission with a view to rendering the concentration compliant with the provisions of the LPC. In this case the Commission may adopt a decision declaring that the concentration is compliant with the provisions of the LPC and in the same decision shall determine the conditions and impose obligations intended to insure that the participants act in line with the commitments undertaken with the Commission; any breach of the commitment attached to the decision declaring the concentration as compliant with the LPC is a justified reason for the Commission to revoke such decision; or
- the Commission may adopt a decision declaring that the concentration is not compliant with the provisions of the LPC if it finds that the concentration shall have as its effect a significant impediment of effective competition.
What is the statutory timetable for clearance? Can it be speeded up?
Once the Commission receives all the data and documents, it shall issue a certificate of completeness and start to examine the notification of the concentration. Within 25 working days of receipt of the complete notification, the Commission shall make the decision on the compatibility of the merger with the LPC, or it shall make a procedural order initiating an in-depth procedure if it finds that the notified concentration falls under the provisions of the LPC, but might not be compliant with the LPC.
This term may be extended up to 35 working days if the participants in the concentration undertake commitments in relation to the Commission with a view to rendering the concentration compliant with the LPC.
If an in-depth procedure has been initiated, the decision appraising the concentration has to be passed within 90 working days of the date of initiating the procedure. At any time following the initiation of the procedure, the time limits may be extended by the Commission in agreement with the participants in the concentration and the total duration of each extension may not exceed 20 working days.
If the Commission has not adopted a decision within the prescribed deadlines, the concentration shall be considered to be compliant with the provisions of the LPC.
By exception, the time limits stipulated with the LPC shall not be binding on the Commission when, as a result of circumstances for which one of the participants is responsible, the Commission had to request ex officio from the undertakings to submit necessary data regarding their economic and financial standing, their business relations, 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 if the Commission had to perform other relevant actions by inspection and obtaining of evidence on the site.
The procedure cannot be speeded up.