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Process and timing
Is the notification process voluntary or mandatory?
The notification process is mandatory. The obligation to notify rests on the party or parties that will have control over the company or assets after the transaction.
What timing requirements apply when filing a notification?
There are no timing requirements when filing a notification. However:
- a concentration subject to mandatory notification must be filed (and cleared) prior to its execution; and
- a concentration involving a public bid must be notified to the National Markets and Competition Commission (NMCC) within five working days of the submission of the authorisation request before the Securities Market National Commission.
What form should the notification take? What content is required?
The notifying party/parties must submit an official form before the NMCC. The official form is available as an annex to the Regulation on the Defence of Competition and requires similar information to that requested by the European Commission – namely:
- information on the parties (contact details, business activities, turnover, etc);
- information on the concentration (structure of the transaction, economic rationale, etc);
- information on the markets (market shares, level of concentration, barriers to entry, supply and demand structure, distribution networks, etc); and
- other aspects such as ancillary restraints, vertical concerns or efficiencies.
However, the notifying party/parties may submit an official short form in cases that are less likely to give rise to competition concerns. In order to use this simplified procedure, one of the following requirements must be met:
- None of the parties to the concentration is engaged in business activities in the same relevant product and geographic market, or in a market that is upstream or downstream of a market in which another party to the concentration is engaged;
- The participation of the parties in the market, due to its negligible importance, is not capable of having a significant effect on competition. A participation of minor importance will be considered to exist when:
o the parties do not have a combined market share of more than 15% in the same product or service market at a national level or in a geographic market therein, or if they do reach a combined market share of more than 15% but less than 30%, the increase in market share does not exceed 2%; and
o the parties do not reach an individual or combined share of 25% in a product market that is upstream or downstream of a product market in which the other party to the concentration is active at a national level or in a geographical market defined therein;
- A party is to acquire sole control of an undertaking over which it already has joint control; or
- In the case of a joint venture, where it is not engaged and not expected to engage in activities in the national territory or if such activities are marginal. An activity will be considered as marginal in the Spanish market if its turnover does not exceed (or is not expected to exceed) €6 million.
The simplified procedure reduces the amount of information required mainly with regard to the market information. However, the Directorate for Investigation can request the notifying party/parties to file an ordinary form even if the concentration qualifies for a simplified procedure – for instance, in those cases where it is difficult to define the relevant markets, if one of the parties is an important patent holder or where at least two parties are present in closely related neighbouring markets.
Is there a pre-notification process before formal notification, and if so, what does this involve?
Yes. The parties can submit a draft filing form. There are no formal time requirements. However, depending on the transaction, it typically lasts between two and four weeks.
Can a merger be implemented before clearance is obtained?
The parties cannot execute a concentration subject to mandatory notification before getting clearance from the NMCC.
Nevertheless, the Spanish Competition Act allows the parties to request a derogation from the suspension obligation. If the NMCC grants the derogation, it may impose certain conditions on the parties with a view to ensuring the efficacy of the decision. However, in practice the NMCC rarely grants such derogation.
Guidance from authorities
What guidance is available from the authorities?
The NMCC provides both formal and informal guidance to undertakings.
Regarding formal guidance, a prior consultation mechanism is available for the parties. However, the NMCC will provide guidance only on whether the transaction is a ‘concentration’ according to the Competition Act or whether it meets the thresholds that trigger the obligation to notify the transaction. This consultation is confidential and the NMCC is not subject to any time restriction. However, in practice, the NMCC issues the decision within three months.
Parties can also request informal guidance on both jurisdictional and substantive issues in the context of the pre-notification phase (see above).
What fees are payable to the authority for filing a notification?
The notifying party or parties must pay a fee.
The fees are reviewed annually. The current filing fees for merger control proceedings are:
- €5,502.15 when the aggregate turnover in Spain of all of the parties does not exceed €240 million;
- €11,004.31 when the aggregate turnover in Spain of all of the parties exceeds €240 million but not €480 million; and
- €22,008.62 when the aggregate turnover in Spain of all of the parties exceeds €480 million but not €3 billion.
A fixed amount of €43,944 is payable when the relevant turnover exceeds €3 billion and an additional €11,004.31 for each €3 billion in excess of that amount. The maximum payable fee is limited to €109,860.
For those concentrations that qualify for the simplified procedure, there is a fixed fee of €1,545.45.
Publicity and confidentiality
What provisions apply regarding publicity and confidentiality?
Publicity Once the notifying party or parties has filed the notification form, the NMCC will publish information about the party/parties, the economic sector, the thresholds that have triggered the obligation to undergo the merger control procedure and the date of notification (www.cnmc.es/acuerdos-y-decisiones).
Furthermore, a non-confidential version of the decision will be published on the NMCC’s webpage.
Confidentiality The NMCC can classify any documentation as confidential, either at its own or at the notifying party’s request. Parties will always have to submit a confidential and a non-confidential version jointly with a reasoned request explaining why they believe that certain information should remain undisclosed.
Are there any penalties for failing to notify a merger?
If the parties fail to notify a concentration subject to mandatory notification, the NMCC shall oblige them to notify within 20 working days. If the parties miss that deadline, the NMCC may:
- decide to start the merger control proceedings investigation; and
- impose penalties of €12,000 per day for each day that the parties delay notifying the concentration.
Further, failure to meet the 20-day deadline, or the five-day deadline when it comes to a public bid, is considered a minor infringement. Fines of up to 1% of the total turnover of the infringing party/parties in the preceding year may be imposed. And failure to notify a concentration prior to its execution (‘gun jumping’) is considered a serious infringement. Fines of up to 5% of the total turnover of the infringing party/parties in the preceding year may be imposed.
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