merger control - lenz & staehelin 2 getting the deal through – merger control 2018 the growing...

Merger ControlThe international regulation of mergers and joint ventures in 71 jurisdictions worldwide

Consulting editorJohn Davies

2018© Law Business Research 2017

Merger Control 2018Consulting editor

John DaviesFreshfields Bruckhaus Deringer

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© Law Business Research Ltd 2017No photocopying without a CLA licence. First published 1996Twenty-second editionISSN 1365-7976

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© Law Business Research 2017

CONTENTS

2 Getting the Deal Through – Merger Control 2018

The growing document burden: coordinating discovery in cross-border merger reviews 7Michele Davis, Ninette Dodoo, Sascha Schubert and Gian Luca ZampaFreshfields Bruckhaus Deringer

Recent economic applications in EU merger control: UPP and beyond 10Hans W Friederiszick, Rainer Nitsche, Theon van Dijk and Vincent VeroudenE.CA Economics

Timelines 14Michael Bo Jaspers and Joanna GoyderFreshfields Bruckhaus Deringer

Acknowledgements for verifying contents 39

Albania 41Günter Bauer, Denis Selimi and Jochen AnweilerWolf Theiss

Argentina 46Miguel del Pino and Santiago del RioMarval, O’Farrell & Mairal

Australia 52Jacqueline Downes, Robert Walker and Felicity McMahonAllens

Austria 61Maria Dreher and Thomas LübbigFreshfields Bruckhaus Deringer

Belgium 69Laurent Garzaniti, Thomas Janssens, Tone Oeyen and Amaryllis MüllerFreshfields Bruckhaus Deringer

Bolivia 75Jorge Luis Inchauste ComboniGuevara & Gutierrez SC – Servicios Legales

Bosnia and Herzegovina 79Günter Bauer and Naida ČustovićWolf Theiss

Brazil 84Marcelo Calliari, Daniel Andreoli, Joana Cianfarani and Vivian Fraga do Nascimento ArrudaTozziniFreire Advogados

Bulgaria 89Peter PetrovBoyanov & Co

Canada 94Neil Campbell, James Musgrove, Mark Opashinov and Joshua ChadMcMillan LLP

Chile 101Claudio Lizana, Lorena Pavic and María José VillalónCarey

China 106Nicholas French, Ninette Dodoo, Janet (Jingyuan) Wang and Tracy (Jia) LuFreshfields Bruckhaus Deringer

Colombia 114Hernán Panesso and Sebastián GómezPosse Herrera Ruiz

COMESA overview 119Shawn van der Meulen and Mmadika MoloiWebber Wentzel

Croatia 122Luka Tadić-Čolić and Luka Čolić Wolf Theiss

Cyprus 128Anastasios A Antoniou and Christina McCollumAntoniou McCollum & Co LLC

Czech Republic 133Martin Nedelka and Radovan KubáčNedelka Kubáč advokáti

Denmark 138Morten Kofmann, Jens Munk Plum, Erik Bertelsen and Bart CreveKromann Reumert

Ecuador 143Roque Bernardo Bustamante and Juan Andrés GortaireBustamante & Bustamante Law Firm

European Union 148John Davies, Rafique Bachour and Angeline WoodsFreshfields Bruckhaus Deringer

Faroe Islands 156Morten Kofmann, Jens Munk Plum, Erik Bertelsen and Bart CreveKromann Reumert

Finland 159Christian Wik, Niko Hukkinen and Sari RasinkangasRoschier, Attorneys Ltd

France 164Jérôme Philippe and François GordonFreshfields Bruckhaus Deringer

Germany 173Helmut Bergmann, Frank Röhling and Bertrand GuerinFreshfields Bruckhaus Deringer

Greece 182Aida EconomouVainanidis Economou & Associates


www.gettingthedealthrough.com 3

CONTENTS

Greenland 187Morten Kofmann, Jens Munk Plum, Erik Bertelsen and Bart CreveKromann Reumert

Hong Kong 190Alastair Mordaunt and Joy WongFreshfields Bruckhaus Deringer

Hungary 195László Zlatarov, Dániel Arányi and Dalma KovácsWeil, Gotshal & Manges

Iceland 199Hulda Árnadóttir and Guðrún Lilja SigurðardóttirLEX

India 204Shweta Shroff Chopra, Harman Singh Sandhu and Rohan AroraShardul Amarchand Mangaldas & Co

Indonesia 210HMBC Rikrik Rizkiyana, Anastasia PR Daniyati and Ingrid Gratsya ZegaAssegaf Hamzah & Partners

Ireland 217Helen Kelly and Simon ShinkwinMatheson

Israel 223Eytan Epstein, Tamar Dolev-Green and Eti PortookM Firon & Co

Italy 230Gian Luca ZampaFreshfields Bruckhaus Deringer

Japan 239Akinori Uesugi and Kaori YamadaFreshfields Bruckhaus Deringer

Kenya 246Waringa Njonjo and Linda OndimuMMAN Advocates

Korea 252Seong-Un Yun and Sanghoon ShinBae, Kim & Lee LLC

Liechtenstein 257Heinz FrommeltSele Frommelt & Partners Attorneys at Law Ltd

Macedonia 262Vesna Gavriloska and Margareta TasevaČakmakova Advocates

Malta 269Ian Gauci and Cherise Ann AbelaGTG Advocates

Mexico 276Gabriel CastañedaCastañeda y Asociados

Morocco 281Corinne Khayat and Maïja BrossardUGGC Avocats

Mozambique 287Fabrícia de Almeida Henriques Henriques, Rocha & AssociadosPedro de Gouveia e Melo Morais Leitão, Galvão Teles, Soares da Silva & Associados

Netherlands 292Winfred Knibbeler and Paul van den BergFreshfields Bruckhaus Deringer

New Zealand 298Neil Anderson, Simon Peart and Harriet HansenChapman Tripp

Nigeria 303Babatunde Irukera and Ikem IsiekwenaSimmonsCooper Partners

Norway 308Jonn Ola Sørensen and Eivind StageWikborg Rein

Pakistan 313Waqqas Mir, Mian Tariq Hassan, Sameer Khosa, Syed Shahab Qutub and Fatima Waseem MalikAxis Law Chambers

Philippines 319Jerry S Coloma and Nicholas Felix L TyMosveldtt Law

Poland 323Aleksander Stawicki and Bartosz TurnoWKB Wierciński Kwieciński Baehr

Portugal 329Mário Marques Mendes and Pedro Vilarinho PiresGómez-Acebo & Pombo

Romania 336Adrian SterWolf Theiss

Russia 341Alexander ViktorovFreshfields Bruckhaus Deringer

Saudi Arabia 346Fares Al-Hejailan, Rafique Bachour and Anna BiganzoliFreshfields Bruckhaus Deringer

Serbia 351Maja Stanković and Marina BulatovićWolf Theiss


CONTENTS


Singapore 358Lim Chong Kin and Corinne ChewDrew & Napier LLC

Slovakia 367Günter Bauer, Zuzana Nikodémová and Michal StofkoWolf Theiss

Slovenia 373Günter Bauer, Klemen Radosavljević and Tjaša LahovnikWolf Theiss

South Africa 378Robert Legh and Tamara DiniBowmans

Spain 388Francisco Cantos, Álvaro Iza and Enrique CarreraFreshfields Bruckhaus Deringer

Sweden 394Tommy Pettersson, Johan Carle and Stefan Perván LindeborgMannheimer Swartling

Switzerland 399Marcel Meinhardt, Benoît Merkt and Astrid WaserLenz & Staehelin

Taiwan 404Mark Ohlson, Charles Hwang and Felix WangYangMing Partners

Thailand 411Panuwat Chalongkuamdee and Pitchapa TiamsuttikarnWeerawong, Chinnavat & Partners Ltd

Turkey 415Gönenç GürkaynakELIG, Attorneys-at-Law

Ukraine 422Igor Svechkar, Alexey Pustovit and Oleksandr VoznyukAsters

United Arab Emirates 428Rafique Bachour and Anna BiganzoliFreshfields Bruckhaus Deringer

United Kingdom 433Martin McElwee, Olivia Hagger and Michael CaldecottFreshfields Bruckhaus Deringer

United States 440Ronan P Harty and Mary K MarksDavis Polk & Wardwell LLP

Uzbekistan 449Bakhodir JabborovGRATA International Law Firm

Zambia 453Sydney ChisengaCorpus Legal Practitioners

The ICN in 2016–2017 458Andreas MundtInternational Competition Network

Quick reference tables 459


Lenz & Staehelin SWITZERLAND


SwitzerlandMarcel Meinhardt, Benoît Merkt and Astrid WaserLenz & Staehelin

Legislation and jurisdiction

1 What is the relevant legislation and who enforces it?Swiss merger control is governed by the Federal Act on Cartels and Other Restrictions of Competition, and the Ordinance on the Control of Concentrations of Undertakings (together, the Competition Law). The Competition Law came into effect on 1 July 1996 and was revised in 2004. Further minor amendments have since been made. However, an intended major review of the Competition Law was rejected by the Swiss parliament in September 2014.

Merger control is enforced by the Competition Commission (the ComCo). The ComCo consists of between 11 and 15 members (currently 12), the majority of whom must be independent experts. It is based in Berne. The cases are prepared and processed by the Secretariat of the ComCo (the Secretariat). The Secretariat is divided into four depart-ments responsible for product markets, infrastructure, services and construction respectively.

2 What kinds of mergers are caught?Transactions that are subject to merger control are:• statutory mergers of previously independent enterprises;• acquisition of control over a previously independent enterprise or

parts thereof, including through the acquisition of equity interests or the conclusion of agreements. Acquisitions of minority share-holdings are not subject to merger control, except for any con-tractual arrangements or factual circumstances conferring factual control on the minority shareholder. However, the ComCo has decided that the acquisition of a minority interest may qualify as an anticompetitive agreement if the enterprises concerned intend to cooperate; and

• acquisition of joint control over an enterprise (joint venture).

3 What types of joint ventures are caught?There are three different types of joint ventures caught by merger control:• acquisition of joint control over an existing enterprise;• acquisition of joint control over an existing joint venture if the joint

venture performs all the functions of an autonomous economic entity on a lasting basis; and

• creation of a new joint venture if the joint venture performs all the functions of an autonomous economic entity on a lasting basis and if the business activities from at least one of the controlling enter-prises are transferred to the joint venture.

Joint ventures for a transitional period are generally not caught by the Competition Law unless the period envisaged is sufficiently long or the term is renewable.

4 Is there a definition of ‘control’ and are minority and other interests less than control caught?

The Competition Law defines control as the ability to exercise a decisive influence on the activity of another enterprise by acquiring its shares, or in any other manner. In particular, this ability is deemed to exist if an enterprise is in a position to determine the production, the prices, the investments, the supply, the sales or the distribution of the profits

of the other enterprise. Control is also assumed if major aspects of a company’s business activity or its general business policy may be deci-sively influenced. Whether control is actually or potentially, directly or indirectly, de jure or de facto exercised is irrelevant. However, the mere acquisition of a non-controlling minority interest is not notifiable.

5 What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

The test applied to mergers is based on turnover. Two, in comparison to other jurisdictions relatively high, turnover thresholds must be reached cumulatively: for the last business year prior to the merger, the enter-prises concerned must have reported an aggregate turnover of at least 2 billion Swiss francs worldwide or an aggregate turnover in Switzerland of at least 500 million Swiss francs, and at least two of the enterprises involved in the transaction must have reported individual turnovers in Switzerland of at least 100 million Swiss francs. Turnover is calculated on a consolidated basis, but excluding intra-group business.

In the case of insurance companies, the gross annual insurance premiums are taken into account for the purpose of determining the relevant thresholds.

The turnover calculation for banks and financial intermediaries is based on gross income. With respect to the geographic allocation of turnover, the notification form of the ComCo (see question 16) provides that the Swiss turnover of a bank or financial intermediary is calculated based on the income received by the branch or division established in Switzerland.

In general, the test for the geographic allocation of the turnover is the contractual delivery place of a product (place of performance) and the place where competition with other alternative suppliers takes place respectively. The billing address is not relevant.

In addition, once the ComCo has established that a specific enter-prise holds a dominant market position, every merger transaction, even if the turnover threshold are not met, involving that enterprise in the market in which it holds a dominant position or in an adjacent market or in a market upstream or downstream thereof is subject to the notification requirement, irrespective of any thresholds. The ComCo does not publish a list of enterprises held to be dominant. In 2014, the Federal Administrative Court held that this provision of the Cartel Act had to be interpreted narrowly. However, in a recent recommendation, the ComCo widened the scope of application of article 9, paragraph 4 of the Cartel Act and held that a single economic entity between the joint venture and its mother companies had to be assumed. Hence, to determine whether a notification obligation is triggered, the joint ven-ture and the companies controlling the joint venture are to be consid-ered. However, only if the binding part of a final and non-appealable decision states a market dominant position, a notification obligation for future concentrations is triggered. In contrast, no such obligation arises if only the reasoning of a decision holds an undertaking to be market dominant.

Parliament may adjust the turnover thresholds taking account of any change in circumstances and may establish special criteria for the notification of concentrations in certain sectors of the economy. Until now, no such federal decree has been passed.


SWITZERLAND Lenz & Staehelin


6 Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

Filing is mandatory prior to completion of the transaction provided the turnover thresholds are reached or a market dominant position in the meaning of article 9, paragraph 4 of the Cartel Act has been established (see question 5). There are no exceptions to this principle.

7 Do foreign-to-foreign mergers have to be notified and is there a local effects test?

The Competition Law is applicable to foreign-to-foreign mergers pro-vided the relevant thresholds are reached with respect to Switzerland (see question 5). According to the Federal Supreme Court, whenever the turnover thresholds of the Competition Law are met, an effect on the Swiss market is presumed, thus triggering a mandatory pre-merger filing.

In practice, given the relatively high thresholds, it is unlikely that a foreign-to-foreign merger would become subject to Swiss merger control without, at the same time, being subject to the relevant foreign merger control.

8 Are there also rules on foreign investment, special sectors or other relevant approvals?

Special authorisations are required if the merger transaction involves banks or Swiss real estate companies.

If a concentration of banks is deemed necessary for reasons related to creditor protection, namely rescue mergers, it is reviewed by the Swiss Financial Market Supervisory Authority (FINMA). However, the notification must still be addressed to the ComCo.

Under the Federal Act on the Acquisition of Real Estate by Foreign Persons, the parties of a merger involving a foreign enterprise and a Swiss real estate company (ie, a company whose principal purpose is the holding of real estate in Switzerland and whose assets include a sig-nificant portfolio of residential properties in Switzerland) may need to obtain a special permit from the competent cantonal (local) authorities.

Furthermore, special authorisation requirements apply to enter-prises holding special rights, such as broadcasting, telecommunication and air transport licences.

Notification and clearance timetable

9 What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

A filing must be made prior to the completion of the merger. Typically, therefore, a filing will be made after the relevant agreements have been signed, but prior to completion. If a notifiable merger is not filed, the enterprise that was required to file may face a fine of up to 1 million Swiss francs. In addition, the management (individuals) may also be personally fined up to 20,000 Swiss francs. To date, the ComCo has imposed several fines on enterprises that did not file or filed a notifi-cation too late. In contrast, the managers of such enterprises have not been fined so far. Fines are calculated based on the following objec-tive criteria:• whether the notification requirement was breached intentionally

or negligently;• importance of the enterprises involved in the relevant market,

measured by turnover realised in Switzerland;• whether prima facie the concentration represents a threat to com-

petition. Such a threat is presumed if the total aggregate market share of the enterprises involved in the concentration is 20 per cent or more (or, if no market shares are combined, the market share of one of these companies is 30 per cent or more); and

• whether the concentration adversely affects effective competition, that is, whether it creates or enhances a dominant market position that eliminates effective competition (without enhancing competi-tion in another market in a way that outweighs the negative effects of the dominant market position).

10 Who is responsible for filing and are filing fees required?In the case of a statutory merger, notification must be made jointly by the companies involved. Where control over an enterprise is acquired, the filing must be made by the enterprise or enterprises acquiring control. If a joint notification is made, the enterprises are required to

designate at least one common representative to the ComCo. For a Phase I investigation (see question 17) there is a lump-sum filing fee of 5,000 Swiss francs. In a Phase II investigation, the Secretariat of the ComCo charges an hourly rate of 100 to 400 Swiss francs depending on the urgency of the case and the seniority of the case handler.

11 What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

Once notification is complete, the ComCo informs the enterprises con-cerned of the opening of an investigation within one month of receiv-ing the notification. In case no such notice is given within that time period, the concentration may be implemented without reservation. The provisional ban does not apply if the ComCo prior to the expiry of the period of one month notifies the enterprises that it regards the concentration to comply with the Competition Law (comfort letter). Alternatively, the ComCo at the request of the enterprises may provide authorisation to implement the merger for good cause, in particular if the merger otherwise could not be completed or the enterprises would suffer great financial loss. If the ComCo decides to open an investiga-tion (see question 17) the enterprises may apply for a provisional com-pletion of the transaction for good cause.

12 What are the possible sanctions involved in closing before clearance and are they applied in practice?

If an enterprise fails to comply with the provisional ban on closing the merger after notification to the ComCo, the enterprise may face a fine of up to 1 million Swiss francs. In addition, the enterprise may be required to take measures to reinstate effective competition, either by unwinding the transaction, by ceasing to exercise effective control, or by any other appropriate action. Unlike the breach of the notification requirement, there are no individual sanctions for the management.

13 Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

As merger control is applicable to foreign-to-foreign mergers (see ques-tion 7), they are also subject to the ordinary sanctions regime. In fact, the ComCo has already fined enterprises of foreign-to-foreign mergers for breaching the notification requirement (Rhône-Poulenc SA/Merck and Banque Nationale de Paris (BNP)/Paribas).

14 What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

The Competition Law does not provide for any specific solutions to remedy Swiss antitrust issues in a foreign-to-foreign merger. Instead, the general remedies outlined above are applicable (see question 11 and 12). To our knowledge, ‘hold-separate’ arrangements have never been put into practice or accepted by the ComCo in relation to a for-eign-to-foreign merger. However, arrangements regarding the voting rights of the shares of a party to the merger have been accepted and practised. If the antitrust issue is merely a local one and therefore does not arise at a European level, it may often be remedied on the basis of competitive arguments submitted in the filing.

15 Are there any special merger control rules applicable to public takeover bids?

The Competition Law does not contain any specific rules regarding public takeover bids. In these cases, the ComCo should be contacted in advance so that it can coordinate its course of action with the Swiss Takeover Board. This is particularly important for hostile bids. Past practice has shown that in most cases the ComCo will substantially follow the rules of the EU Merger Regulation on public takeover bids. Also, it is possible to request provisional completion specifically in pub-lic takeover bids.

16 What is the level of detail required in the preparation of a filing?

The ComCo issues a standard notification form. The notification form basically requires enterprises to provide the following information and materials:• company name, registered office and description of business activ-

ity of parties to the merger;




• a description of the proposed merger, including objectives to be achieved by it;

• turnovers, gross premium revenues or gross income, as the case may be, of the enterprises involved for Switzerland and worldwide;

• information on the relevant product and geographic markets affected, as well as information on the main competitors and respective market shares;

• data regarding new market entries over the past five years in the relevant markets as well as barriers to entry and, in particular, esti-mates of market entry costs;

• copies of the latest annual accounts and business reports of the enterprises involved; and

• copies of the relevant agreements relating to the merger.

For public tenders, copies of the public tender offer and copies of reports, assessments and business plans made in connection with the merger, to the extent they contain information relevant for the assess-ment of the merger for competition purposes, must also be supplied.

Depending on the complexity of the case, the preparation of a typi-cal filing may take anywhere between two to six weeks. A filing can be made in any one of the official languages of Switzerland (French, German or Italian). Accompanying documents may also be submitted in English.

For foreign-to-foreign mergers that do not significantly affect the Swiss market but meet the threshold requirements, a simplified noti-fication procedure is available upon application. The ComCo may, for valid reasons, release the applicant from the obligation to provide cer-tain information and materials.

17 What is the statutory timetable for clearance? Can it be speeded up?

The ComCo is required to notify the enterprises within one month of receiving the complete notification whether it intends to initiate an investigation (Phase I of the procedure). If within this period no notifi-cation is made by the ComCo, the merger may be completed. In prac-tice, the one-month period can be shortened in less complex filings if, prior to the formal notification, the draft filing is submitted to the ComCo for review, thus enabling the ComCo to communicate its posi-tion shortly after formal notification is made.

If the ComCo decides to initiate an investigation (Phase II of the procedure), it must be completed within four months, unless the pro-cess has been delayed by the enterprises concerned. The ComCo has no possibilities to prolong Phase I without initiating a Phase II procedure.

18 What are the typical steps and different phases of the investigation?

As to the timetable, see question 17. In the first step of an investigation, the Secretariat usually requests further information from the parties. The enterprises involved in the merger are required to furnish the ComCo with any additional information that it may request. In the sec-ond step, unless the filing obviously raises no concerns, the Secretariat sends out questionnaires to competitors, suppliers and customers of the enterprises involved. The answers received will usually have an important bearing on the position taken by the ComCo.

If the ComCo decides to open a Phase II investigation, this is pub-lished. Usually, in a Phase II investigation, hearings take place and the parties may file further documents and information. Also, the ComCo sends out additional questionnaires to customers, suppliers and com-petitors in order to deepen the market research and analysis. Finally, when it comes to remedies, close contact is established between the Secretariat and the enterprises involved to define the scope of any undertakings.

Substantive assessment

19 What is the substantive test for clearance?The applicable substantive test is the CSDP test (creation or strength-ening of dominant position). In September 2014, the Swiss parliament rejected the planned review of the Cartel Act which intended to move to the to the SIEC test (significant impediment to effective competi-tion) as applied in the EU.

Remaining with the CSDP test, a merger is to be cleared based on one of the following two tests:

• the enterprises involved do not create or strengthen a dominant position eliminating effective competition in the relevant mar-ket; or

• competition in another market is enhanced by the merger and such improvement outweighs the harmful effects resulting from the creation or strengthening of the dominant position in the rel-evant market.

For compelling public reasons (employment, regional develop-ment), a concentration of enterprises that has been prohibited by the ComCo may be authorised by the Federal Council at the request of the enterprises.

20 Is there a special substantive test for joint ventures?The Competition Law does not provide for any specific substantive rules with respect to joint ventures. The same test as outlined under question 19 is applicable.

21 What are the ‘theories of harm’ that the authorities will investigate?

As mentioned in question 19, the substantive test for clearance in Switzerland is that of market dominance. Applying this test, the ComCo also investigates coordinated effects in cases of oligopolies and unilateral effects. In addition, the ComCo examines conglomerate effects and vertical foreclosure.

22 To what extent are non-competition issues relevant in the review process?

As a rule, the ComCo does not take into consideration non-competi-tion issues in reviewing a merger. However, as the collapse of Swissair and decisions in agricultural markets in particular have shown, politi-cal considerations may have some impact on how (swiftly) the ComCo takes its decisions.

In connection with a merger involving banks, the FINMA has the power to clear a merger that it deems necessary for reasons of credi-tor protection, which take precedence over competition issues. In such cases, the FINMA replaces the ComCo, which is given a right of consul-tation only (see question 8).

23 To what extent does the authority take into account economic efficiencies in the review process?

The ComCo takes – to a certain extent – economic efficiencies into account. The ComCo assesses whether and to what extent efficiency gains may positively affect competition and whether such gains are passed on to the consumers. Also, economic efficiency gains in one market may outweigh certain deficiencies of the merger in another (see question 19).

Remedies and ancillary restraints

24 What powers do the authorities have to prohibit or otherwise interfere with a transaction?

To the extent the enterprises involved do not comply with the order of the ComCo prohibiting a merger, the ComCo can take all appropriate measures in order to reinstate effective competition. Such measures include the cancelling of the merger transaction and the termination of control by the acquiring enterprise over the target.

25 Is it possible to remedy competition issues, for example by giving divestment undertakings or behavioural remedies?

The clearance of a proposed merger may be subject to certain condi-tions or obligations designed to safeguard effective competition. The law does not specify the types of conditions or obligations that may be attached. Recent cases have shown that conditions and other rem-edies will generally be discussed by the enterprises concerned with the ComCo. Such remedies could involve divestments or certain behav-ioural undertakings.

26 What are the basic conditions and timing issues applicable to a divestment or other remedy?

The divestment has to eliminate all material objections of the ComCo to the proposed merger. According to the ComCo, the divestment


SWITZERLAND Lenz & Staehelin


must be completed within a fixed period. It is not sufficient for the parties to commit to divest ‘at the earliest possible stage’. A specific deadline must be offered. In international filings, it is important to coordinate the divestments to be proposed to other merger control authorities involved, namely the European Commission. So far, pro-posals for remedies have only rarely been offered by the parties in a Phase I investigation.

27 What is the track record of the authority in requiring remedies in foreign-to-foreign mergers?

Remedies have been required in relatively few foreign mergers. In par-allel filings with the European Commission, the remedies offered to the EU were also recognised and accepted by the ComCo.

28 In what circumstances will the clearance decision cover related arrangements (ancillary restrictions)?

In general, the ComCo only deals with ancillary restraints, in particular non-compete obligations that are directly related and necessary to the merger. The case practice of the ComCo, by and large, is in line with the European Commission’s Notice on Ancillary Restraints. Other arrange-ments related to the merger are in most cases explicitly excluded from the clearance decision. If the parties have doubts about the legality of the arrangements not covered by the clearance decision, they have the option to submit the arrangement to the competition authorities for a formal or informal ruling.

Involvement of other parties or authorities

29 Are customers and competitors involved in the review process and what rights do complainants have?

In most cases, the ComCo will send out questionnaires to customers and competitors soliciting their opinion on a filed merger (see question 18). However, customers and competitors have no formal procedural rights and the ComCo is neither required to issue questionnaires nor bound by any answers submitted.

If the ComCo decides to open an investigation proceeding (Phase II of the procedure), it publishes the principal terms of the merger and gives third parties the right to state their position with respect to the proposed merger within a certain time limit. Third parties must sub-mit their statements in writing. Since 2008, the ComCo has changed its previous practice so that third-party hearings (of competitors in par-ticular) are in principle held in the presence of the participating enter-prises. Third parties also have the right to access the file. On appeal, however, third parties have no such rights. In particular, according to the case law of the Federal Supreme Court, third parties are not enti-tled to any remedies against the decision of the ComCo to permit or prohibit a merger.

30 What publicity is given to the process and how do you protect commercial information, including business secrets, from disclosure?

The mere filing of a notification is not made public. However, the deci-sion to open an investigation proceeding (Phase II) as well as the final decision of the ComCo authorising or prohibiting a merger are pub-lished both in the Official Federal Journal and the Official Commercial Gazette. Since the involvement of third parties in the investigation procedure is limited, there are no specific Competition Law provisions regarding the protection of business secrets. The merging parties are advised to specifically identify sensitive business information and ask the ComCo to keep such information strictly confidential. The ComCo is bound not to disclose any business secrets.

31 Do the authorities cooperate with antitrust authorities in other jurisdictions?

The agreement between Switzerland and the EU concerning the cooperation on the application of their competition laws provides a framework for a closer coordination of their respective enforcement activities. With regard to merger control, the scope of the agreement includes in particular mutual notifications of merger investigations, the coordination of merger enforcement activities such as aligning the conditions and obligations for the approval of a merger and the exchange of information obtained in merger investigations. The imple-mentation of the agreement was accompanied by an amendment to the Competition Law by which the parties will be informed about and have the right to comment on the ComCo’s decision to share the parties’ information with a foreign competition authority.

Judicial review

32 What are the opportunities for appeal or judicial review?Decisions of the ComCo are subject to appeal to the Federal Administrative Court. The decision of the Federal Administrative Court is in turn subject to review by the Federal Supreme Court. However, third parties have no right of appeal against merger decisions.

33 What is the usual time frame for appeal or judicial review?An appeal against decisions of the ComCo must be filed with the Federal Administrative Court within 30 days of the formal notification of the decision. The duration of this appeal procedure varies but may well be more than one year.

Decisions of the Federal Administrative Court may be appealed to the Federal Supreme Court within 30 days of the formal notification of the decision. According to recent practice, these proceedings generally take more than one year.

Update and trends

In the past year, for only the second time in its 21-year history the ComCo prohibited a proposed merger.

In May 2017, after a Phase II merger control analysis, the ComCo prohibited the proposed merger between Ticketcorner and Starticket, two Swiss ticketing companies. Starticket and Ticketcorner are directly and indirectly owned by Tamedia AG and Ringier Group, respectively, two Swiss media groups.

Starticket and Ticketcorner are both active in the market for dis-tribution of tickets for concerts, shows etc, through physical and online channels (primary ticketing). Additionally, they provide software solu-tions for direct ticket sales (ticketing software). Contrary to its past practice, the ComCo held that the ticketing market had to be divided into these two separate submarkets.

While the ComCo concluded that the proposed merger would not have been problematic concerning the market for ticketing software, the ComCo considered the proposed merger would have eliminated effective competition in the primary ticketing market. Furthermore, the ComCo concluded that the linkage of the two entities to the two Swiss media groups would also have strengthened their market positions. As the ComCo could not identify any adequate conditions or obligations (see question 25), the proposed merger was prohibited.

Further, in its annual report the ComCo has addressed the digitali-sation of the economy as an opportunity and a danger for competition that leads to new challenges for competition authorities. In connec-tion with merger control, this development is seen by the ComCo to be especially relevant regarding Big Data. The ComCo believes that data flow and its effects should be considered while determining the economic position of an entity. However, until now merger control thresholds solely rely on turnover to determine whether a transaction has to be notified or not. The ComCo is concerned that this situa-tion may lead to mergers not being controlled and assessed despite eliminating effective competition because the role of data is not taken into account.

Regarding legislative changes, the Swiss government is currently analysing whether Switzerland should switch from the currently applied CSDP to the SIEC test. The government believes that this change of test for merger proceedings would have both a medium-term and long-term positive effect on the competitive environment in Switzerland. Until the end of 2017, the government intends to decide whether a proposal to switch to the SIEC test should be submitted to the parliament.




Enforcement practice and future developments

34 What is the recent enforcement record and what are the current enforcement concerns of the authorities?

The ComCo consistently enforces the Competition Law with respect to foreign-to-foreign mergers and has stated that it will more severely penalise companies that fail to notify. The ComCo considers that the sanctions imposed in the past have not been sufficiently effective to deter large international groups.

In the past year, the ComCo regularly had to assess mergers in electronic or online markets respectively.

The ComCo has no specific focus regarding its enforcement policy in merger cases. On a more general level, the competition authori-ties currently focus on horizontal cartels (in particular suspected bid rigging in the road construction sector) and hardcore vertical agree-ments (in particular restrictions on direct or parallel imports from the European Economic Area into Switzerland).

35 Are there current proposals to change the legislation?At the moment, there are no proposals to change the legislation con-cerning merger control. However, the Swiss government is consider-ing the submission of a proposal to the parliament (see ‘Update and trends’).

Marcel Meinhardt [email protected] Benoît Merkt [email protected] Astrid Waser [email protected]

Route de Chêne 301211 Geneva 6Switzerland

Tel: +41 58 450 70 00Fax: +41 58 450 70 01

www.lenzstaehelin.com

Brandschenkestrasse 248027 ZurichSwitzerland

Tel: +41 58 450 80 00Fax: +41 58 450 80 01


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