The Competition Council (CC) of Latvia has summarized entrepreneurs’ and lawyers’ evaluation of the merger control implemented by the CC and the existing regulatory framework in Latvia. Conclusions from the evaluation allowed the CC to identify the most significant difficulties respondents face while drafting merger notifications.
In 2014 and 2015, the CC examined in total 32 mergers. After 21 of these cases the merging party or its representative participated in a survey.
Most respondents while assessing the drafting of the merger notification, admitted clarity of both – criteria for notifying the merger and information required for submitting to the CC. 62% of respondents said that preparing of required information was easy, while most of respondents admitted recruiting an outsourced service provider.
95% of respondents have used the opportunity to consult with the CC by phone or in person. The biggest difficulties, named by respondents were caused by the following issues: correct way to define affected markets and to draw up the notification document, as well as calculation of the market share.
The CC concludes that the format of authorities’ proposed pre-merger consultations is effective – respondents say that employees of the CC provide prompt, clear and understandable information. The CC invites undertakings to make use of pre-merger consultations in order to solve all unclear questions regarding obligation to submit merger notification or required information. Furthermore, the CC has published guidelines on merger notification drafting.
In general, during the examination, entrepreneurs and their representatives positively evaluate the cooperation with the CC. Respondents admit that the CC is a reliable and impartial decision-making authority. Meanwhile, entrepreneurs invite the CC to notify market participants on the commencement of an additional investigation or taken decision more promptly, thus, promoting the merger implementation.
Among respondents there is not a strong belief whether changes within regulatory framework of mergers in Latvia are needed. The most frequently suggested proposal was to exclude criterion of market share from merger notification threshold. It is already provided for amendments to the Competition Law to be revised at the Parliament.
According to the Latvian Competition Law, a permission from the CC is required for mergers where the combined turnover of the participants in the merger for the previous financial year has exceeded EUR 35 572 000 or the total market share of the participants in the merger in the particular market exceeds 40%. More information on the existing merger regulation can be found on the CC’s web page.
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