Delay to approve economic concentrations - The Federal Court of Appeals’ position

On December 23, 2008, Room I of the Federal Court of Appeals in Civil and Commercial Matters (“Court”) revoked Resolution No 46/2008 issued by the National Commission for the Defense of Competition (“Commission”) by means of which the Commission suspended the 45-business day term established by Section 13 of the Antitrust Law No 25,156 (“Antitrust Law”) to authorize economic concentrations in the analysis of a transaction.

Section 13 of the Antitrust Law establishes that the Commission has 45 business days to resolve an economic concentration. It is a usual practice of the Commission to suspend such term every time it requests additional information to assess a transaction.

In the case in question, the Resolution determined to request some information to Provincial regulators. That was the second time that the Commission performed a requirement to the same Provincial regulators. The Commission justified this second request of information on the grounds that a variation in the composition of the shareholders of the companies that notified the economic concentration was evidenced.  Resolution No 46/2008 decided to suspend the 45-business day term established in the Antitrust Law until the Provincial regulators were able to submit their answers.

The Court analyzed the grounds under which the Commission decided to perform the new request of information to Provincial regulators that had already provided their opinion on the economic concentration. The Court analyzed whether, considering the circumstances, evidence and status of the proceedings, the new request of information was reasonable.

The Court stated that the Provincial regulators had already provided their opinion on the transaction and that there were insufficient grounds to request a new opinion. from them The Court expressed that the new intervention and opinion of the Provincial regulators regarding the admissibility of the transaction -considering the change in the composition of the shareholders of the companies that notified the economic concentration- is beyond the legal scope established for regulators pursuant to the applicable regulatory framework.

The Court stated that suspending the terms of the proceedings in the particular case was unreasonable and finally decided to revoke Resolution No 46/2008.

The decision issued by the Court is very important since it stresses the importance of compliance with the terms of approval of economic concentrations. The Antitrust Law states that the authorities have only 45 business days to approve an economic concentration. Additionally, the Court gave a clear message to the Commission by adopting a strict position when considering the reasons to delay the analysis of economic concentrations.

Finally, it must be pointed out that in recent cases the parties have been challenging decisions of the Commission that suspended the terms to analyze economic concentrations, when such suspension was deemed unreasonable.