The FNE submits to public consultation three merger guidelines

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The FNE submits to public consultation three merger guidelines

Until May 15, three guides and two forms prepared by the National Economic Prosecutor’s Office (FNE), regarding the norms of the new merger control system which starts operating at June 1st, will be open to public consultation.

The public consultation includes the Competition Guide, the Threshold Guide, and the Remedies Guide as well as the ordinary and simplified notification form. These documents aim to shed light on the criteria that the FNE will follow in the application of Law N° 20.945 and provide certainty on: the requirements that need to be fulfilled in order for a transaction to fall within the scope of obligatory notification before the FNE; the information that the FNE requires for the review of the transaction, and; the issues the Agency will consider during the evaluation of mitigation measures offered by the Parties to the transaction during the review process.

The objective of the Competition Guide is to detail the criteria that will be used by the FNE to define the actions, acts or conventions that qualify as a merger transaction, according to Decree Law 211. This classification will determine whether the FNE has the authority to review the transaction under the procedure detailed in Title IV of Decree Law 211.

The Guide for the Application of the Thresholds, indicates how to calculate the sales of the economic agents that are subject to the transaction in different situations, in order to faithfully reflect the economic reality and in line with the Exempt Resolution N°667 of the FNE, issued on November 24, 2016.

The third guide regards Remedies and makes reference to the evaluation by the FNE of the measures that are offered by the Parties and details the general principles that the FNE will be willing to consider as part of the decision. This, considering that the notifying parties have the right to offer the remedies that they deem fit to mitigate potential risks to competition.

These remedies will have to be evaluated by the FNE in order to determine whether, if applied, the merger is capable of substantially reducing competition. If this is deemed likely, the transaction should be blocked and, if not, the transaction should be approved subject to such measures. In the case of the FNE blocking the merger, the parties could appeal the decision before the Competition Tribunal.

In addition to the aforementioned Guides, the FNE has published for comments the forms that should be used to notify merger transactions. The first of these is the ordinary form, which specifies the information to be provided to the FNE, in accordance with Decree No. 33 of March 1, 2017 of the Ministry of Economy, Development and Tourism (Ministry of Economy), which Approves the Regulation on the notification of a transaction.

The second is the simplified form, detailing the information to be delivered to the FNE in cases where one of the conditions established in Article 4 of the Regulation is fulfilled. Under the simplified notification mechanism, a smaller amount of background information is necessary, in accordance with Law No. 20.945 and the Regulation prepared by the Ministry of Economy.

The mechanism

The merger control system is described in Title IV of DL 211, incorporated by Law No. 20.945, which improves the system of defense of free competition.

According to this new law, the actions, acts or conventions that comply with the following two copulative requirements should be submitted to the analysis of the FNE. The first is that it should qualify as a merger, in accordance with article 47 of DL 211; And, second, that the sales in Chile of the economic agents subject of the merger must equal or exceed the thresholds established in Exempt Resolution No. 667 of the FNE, dictated in accordance with the provisions of article 48 of DL 211.

The transactions that do not equal or exceed the thresholds may be voluntarily notified by the market agents involved and, likewise, the Agency may open ex officio investigations regarding those mergers that have not been notified.

Spanish versions of these Guidelines may be downloaded here

Competition Guide

Threshold Guide

Remedies Guide

Ordinary notification form

Simplified notification form