The Fast-Track Procedure: A Pending Issue Within Merger Control

1. Introduction

Over the past few years the National Commission for the Defense of Competition (the “Antitrust Commission”) has carried out an important range of actions addressed to comply with the provisions set forth in Law No. 25,156 (the “Antitrust Law”).

Further to the appointment of new Commissioners in 2010 and 2011, the Antitrust Commission has been actively involved in merger control proceedings, the detection of non-notified transactions as well as setting up a Commitments Area in order to track down the effective enforcement of remedies imposed by divestments and/or agreed with the parties.

However, a significant increase in the analysis period taken by the Antitrust Commission is still evidenced, caused by budget restraints and severe understaffing. Thus, the parties subject to the merger control proceedings have increasingly demonstrated the need to set up a fast-track procedure within the merger control procedure.

2. Background

In recent years, the Antitrust Commission has placed a greater degree of its focus on merger control proceedings than on the investigation of anti-competitive conducts. Such focus was generated because Section 14 of the Antitrust Law states that if a decision is not issued within 45 business days of the filing of the application and relevant documents, the transaction shall be considered as tacitly approved.

However, the Antitrust Commission is currently enforcing a ‘stop-the-clock’ interpretation by means of which it considers that the first request for information stops the term of 45 business days, which will not start to run again until the necessary information for the issuance of the final resolution has been obtained from the parties. Although this interpretation has been subject to challenge before the courts, the Antitrust Commission puts it into practice in the dockets.

According to publicly available information, since 1999 the Antitrust Commission has analysed 566 merger control proceedings, among which 530 were approved, 29 conditioned and 7 rejected. Most of the transactions submitted before the Antitrust Commission within the last decade raised no competition concerns, and thus were fully approved pursuant to Section 13, Sub-Section a) of the Antitrust Law.

Notwithstanding the above, the timeframe needed by the Antitrust Commission in the analysis of merger control proceedings has shown a consistent increase over the years. In this regard, while in 2005-2007 competition analysis took an average time of 6 months, the time to issue a final resolution within the 2009-2010 period reached an average of 15.2 months.

This delay in analysis is a result of the ‘stop-the-clock’ policy mentioned above. In view of current timeframes it is advisable for the Antitrust Commission to put into practice a fast-track procedure within merger control.

In order to alleviate the burden imposed on the parties due to long-winded dockets, the Antitrust Commission may start implementing the tacit approval provided in Section 14 of the Antitrust Law so as to facilitate the approval of simple transactions that do not require a deep and lengthy antitrust analysis.

The use of tacit approval would allow the Antitrust Commission to concentrate its efforts on analyzing the most complex transactions, which represent a minor percentage in relation to the total transactions submitted before the Antitrust Commission.

The implementation of this fast track would entail the Antitrust Commission introducing certain amendments to current antitrust regulations and issuing guidelines in relation to the analysis of economic concentrations.

3. Conclusion

As Argentina is undergoing high rates of inflation every year, the economic threshold provided in the Antitrust Law decreases with the years and more merger control transactions are subject to mandatory filing. The outlook for the coming years is that more transactions will be subject to notification.

Even though the Antitrust Commission recognized such scenario and appointed new Commissioners in 2010 and 2011, yet merger control procedural times have not significantly changed in the last year. This shows that there is a clear need for a fast-track procedure. This procedure would have to be used for certain transactions that are simple and do not raise any anticompetitive effect.

Source

Antitrust Commission’s competition reports for 1999/2006 (available at www.mecon.gov.ar/CNDC/novedades.htm). The information for 2007, 2008 and 2009 was drafted based on resolutions available at the Antitrust Commission’s headquarters.