On 18 January 2015, significant amendments to the Polish competition law (Amendment) aimed at making merger control more efficient entered into force. The OCCP also published the secondary legislation (Guidelines), which includes details relevant for the Amendment’s practical implementation, on 27 January 2015.
Two phase proceedings
Before the Amendment (OJ.2014.945) came into force, a statutory review period of two months applied to all concentrations, irrespective of their complexity. Even in uncomplicated cases, the authority (Office for Competition and Consumer Protection – “OCCP”) often exhausted the entire two-month period to review a notification. The Amendment introduces a two-stage procedure for notifications of a concentration, with those transactions that do not raise competition concerns to be cleared within a month from submitting of the complete notification in a stage one procedure. Merger control experts expect that approximately 80% of the notifications will be covered by this stage.
More complex transactions will be dealt with in a second stage. In phase II, the OCCP has to decide within additional four months (ie. altogether five months) from the initial submitting of the initial notification whether to clear the transaction with or without remedies or whether to prohibit the transaction. This second stage will apply: i) in case of particularly complicated matters, ii) to concentrations that can be expected to significantly impede competition, or iii) in cases where market surveys are required.
As was previously already the case, any OCCP request for information sent to the parties will “stop the clock”, which will in practice suspend the above-mentioned review periods.
One can reasonably expect that those merger control filings involving foreign-to-foreign concentrations with no effects in Poland will benefit from the shorter review period under phase one.
De minimis exemptions
Although the general turnover thresholds have not changed (EUR 1 billion worldwide or EUR 50 million in Poland), the Amendment has introduced new de minimis exemptions based on Polish turnover.
In case of mergers, a transaction will be exempted from a notification to the OCCP if the domestic turnover of each of the merging parties did not exceed EUR 10 million in each of the two financial years preceding the transaction.
The same applies to concentrations consisting in the founding of a joint venture. The transaction will be exempted from notification to the OCCP if the domestic turnover of each of the joint venture parents did not exceed EUR 10 million in each of the two financial years preceding the transaction.
The previously applicable EUR 10 million de minimisexemption concerning the takeover of control over an entrepreneur has been extended to cover not only situations in which control is taken over an entrepreneur, but also those in which assets are simultaneously acquired as well.
Deadline for implementing of commitments
Under the previously binding legal framework, a deadline for the implementation of the commitments was disclosed in the text of a decision and thus available to anyone. This practice was heavily criticised by the business community and legal advisors, as in certain cases (eg. an obligation to divest a business) the prospective acquirers were aware of the timeframe in which the business was to be sold. They could use this knowledge in their negotiations with the parties to the transaction. Under the new regime, the deadline for implementing the commitments will not be disclosed to third parties if the addressee of the commitments requests such confidentiality.
Statement of objections
The Amendment has introduced a Statement of Objections (“SO”), which is aimed at increasing companies’ certainty as to the result of merger control proceedings. The SO can be issued by the OCCP at any stage of the proceedings. In cases where the significant impediment of competition is probable, the OCCP will issue the SO, thus allowing the parties to become acquainted with the authority’s position. The notifying parties are entitled to comment on the OCCP’s objections and in practice can propose modifications of the intended concentration. One can expect that SO and the parties’ reply to it will become the phase of the merger control proceeding that will directly precede the discussion on the proposed commitments.
Separate concentrations occurring between the same groups of undertakings are subject to notification to the OCCP if they take place within a period of two years and the added turnover figures of the acquired targets exceed the thresholds of the de minimis exemption. This regulation is aimed at preventing firms from circumventing the obligation to notify by splitting a larger transaction into smaller parts that would not qualify for the notification if considered separately.
Amended notification form
The notification form has been reorganized and the level of the information required has been increased slightly. Irrespective of the complexity of the transaction or its effects on the market, all merger control notifications must be submitted using the special notification form template. However, Part II (Sections 8-9), which requires the parties to submit detailed information on the relevant markets and the market conditions as well as the effects of the transaction must only be completed if the transaction gives rise to so called affected markets. The notion of "affected markets" mirrors the concept applied by the European Commission, although the percentage thresholds are slightly different and amount to 20% and 30% for horizontally and vertically affected markets respectively.