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Procedure and test

Procedure and timetable

What procedures are followed by the authority?  What is the timetable for the merger investigation?

The merger control procedure may have two phases, plus an optional pre-notification phase.

Pre-notification phase

Pre-notification discussions with the National Markets and Competition Commission (NMCC) are advisable. Pre-notification discussions present a number of advantages as they serve to:

  • clarify jurisdictional issues;
  • learn of potential competition concerns at an early stage; and
  • ensure that the notification draft is complete and contains the necessary information for the NMCC to assess the concentration.

In order to benefit from these advantages fully, parties are encouraged to submit a draft filing form.

There are no formal time requirements. However, depending on the transaction, the phase typically lasts between two and four weeks. The pre-notification discussions remain confidential until the parties submit a formal notification.

Phase I 

Once a complete notification is received, the NMCC will open the merger control proceedings. The Directorate of Competition prepares a report and the Council of the NMCC issues a decision on the grounds of the report. 

Phase I lasts up to one month from the date of notification. However, the NMCC may stop the clock if it requests further information from the parties. The one-month period will resume once the information requested has been provided. This initial period may be further extended by 10 working days if the parties decide to offer commitments.

A concentration is considered to be approved if the NMCC does not issue a decision by the end of the period.

Phase II

If the Council of the NMCC considers that a concentration may hinder effective competition, it will refer the concentration for a Phase II investigation. Market tests are usually conducted and interested third parties will have access to the file and be entitled to submit their views on the impact of the concentration in the markets.

This phase is subject to a time limit of two months, extendible by 15 working days if the parties decide to offer remedies. The NMCC may also stop the clock by requesting further information from the notifying parties or from third parties.

The Spanish Council of Ministers may intervene in concentrations where the NMCC has issued a decision blocking the concentration or imposing commitments or conditions on the parties. The Ministry of Economy has 15 working days to refer the case to the Council of Ministers. If so, the Council of Ministers, on the grounds of general interest considerations and within one month, may uphold the decision issued by the NMCC or clear the concentration with or without conditions.

What obligations are imposed on the parties during the process?

The obligation to notify lies with the party or parties having control after the transaction.

The notifying party or parties is required:

  • not to execute the concentration until clearance is granted;
  • to co-operate with the NMCC by providing accurate and reliable information; and
  • to comply with the commitments or the conditions imposed by the NMCC.

What role can third parties play in the process?

Pursuant to Spanish public law, any third party that can prove a legitimate interest may apply to be deemed an interested third party in the merger control proceedings. However, the Spanish Competition Act and Regulation on the Defence of Competition recognise this right formally only during Phase II investigations and not before. Interested third parties may access the file and are entitled to submit their views on the impact of the concentration in the markets.

In addition, the NMCC may send third parties requests for information at any time during the control procedure. If these third parties fail to comply with the request, the Competition Act provides for a fine of up to 1% of the turnover and €12,000 per day for each day of delay in providing information.

Substantive test 

What is the substantive test applied by the authority?

The applicable test for mergers consists of determining whether the transaction may impede the maintenance of effective competition in the relevant market(s), also known as ‘the substantial lessening of competition test’.

In this regard, the NMCC will focus mainly on market structure, market shares, actual and potential competitors, sources of supply, countervailing demand power, barriers to entry and efficiencies.  

Carve-outs

Does the legislation allow carve-out agreements in order to avoid delaying the global closing?

Carve-out agreements may avoid delaying the global closing only when, as a result of them, a given concentration is not subject to mandatory notification because the relevant thresholds are no longer met.

Test for joint ventures

Is a special substantive test applied for joint ventures?

No, joint ventures are analysed in the same way as other types of concentration. However, as well as under the EU Merger Regulation (139/2004), joint ventures are subject to merger control only if they are full-function joint ventures – that is, if they perform all the functions of an economic undertaking on a lasting basis. If a joint venture is not full-function, then the regulator will examine it as an agreement between undertakings (Article 1 of the Competition Act or Article 101 of the Treaty on the Functioning of the European Union).

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