Merger control during the epidemic
In light of the difficulties associated with the coronavirus epidemic, and joining the global trend under the hashtag #flattenthecurve, competition authorities around the world, including Poland, are introducing, more or less officially, extraordinary operating procedures to avoid spreading the coronavirus. This can have a major impact on proceedings before these authorities, including filing and consideration of applications seeking approval of concentrations.
The spokesman of the European Commission announced on 16 March 2020 the introduction of special working procedures for the Commission during the epidemic. A series of notices on these changes have been published on the Commission website on merger control.
First, delays in the merger control process should be anticipated. The Commission encourages undertakings if possible to postpone planned merger notifications, in light of the difficulties that may arise in the upcoming weeks in gathering of essential information by the Commission from third parties, such as customers, suppliers and competitors. Moreover, difficulties should be expected in accessing information and the Commission’s databases, including exchange of information with competition authorities of EU member states.
Second, extraordinary rules have been adopted for electronic filing of documents. The Commission has communicated that hand delivery of documents will still be possible, but may be hindered by the limited presence of the Commission’s staff. As before, the authority should be contacted in advance by telephone before making filings by hand. The Commission will temporarily accept documents also in electronic format and encourages undertakings to file them in this manner (by email to firstname.lastname@example.org, to the attention of officials handling the matter, or via the document exchange platform eTrustEx). Delivery of paper originals will then be arranged at a later time.
At least three merger control proceedings in phase II, i.e. detailed investigation, have already been suspended, due to delays by the parties in submitting information and documents, which could be due to the coronavirus epidemic.
But according to the observed practice, it should be anticipated that the Commission will not be eager to accept new applications, except in urgent cases.
Among competition authorities of EU member states, extraordinary procedures have already been adopted for example by the Bundeskartellamt in Germany. According to a communiqué, the office is closed for personal contact but accessible remotely, particularly by email. The Bundeskartellamt also encourages undertakings to postpone projects requiring contact with the office. Such measures have been adopted by the Irish Competition and Consumer Protection Commission (very similar to those adopted by the European Commission) and by the Austrian authority. In France a warning of possible failure to meet deadlines was published (extensions should be expected), and the Danish and Spanish authorities, for example, have announced suspension of time limits in merger control cases.
In Poland the amendment to the Anti-Crisis Act in force from 31 March 2020 has suspended the running of time limits in administrative proceedings. This applies among other things to deadlines or issuance of approvals of concentrations by the president of the Office of Competition and Consumer Protection (UOKiK).
So far the president of UOKiK has not officially introduced any extraordinary measures connected with the coronavirus epidemic. But according to unofficial information, most of the authority’s staff, including staff of the Department of Concentration Control, are working remotely, and access to the building by third parties is limited. Any meetings with parties or counsel may be held only in exceptional circumstances and using protective measures. The bureau at UOKiK is operating and accepting correspondence, including notifications of intended concentrations. Applications may be also be filed by post, as before. But the reduced staffing of the office may result in delays in pending proceedings. As in the case of the European Commission, difficulties in the flow of documents, e.g. documents sent by post, may impact the submission of information and documents, particularly market studies requiring contact with numerous entities (competitors, supplier and customers of the undertakings participating in notified concentrations).
The restrictions on operation of competition authorities may thus have a major impact on proceedings already pending, particularly in complex cases requiring market research, for example, or raising the regulator’s doubts as to the effects on competition. Conducting the second phase of proceedings will now be greatly impeded, including in Poland. It may be anticipated that the president of UOKiK will exercise his entitlement to prolong such proceedings. M&A transactions now being prepared and requiring notification should be structured to allow for possible delays as compared to the originally adopted timetable for filing notification of the intended concentration and obtaining approval from the competition authority.
Dr Marcin Kulesza, Competition and Consumer Protection practice, Wardyński & Partners