Merger notification requirements to be eased

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The Administration Minister recently confirmed that the Government will submit a White Paper proposing a significant raise in the thresholds for the requirement of notifying mergers to the Norwegian Competition Authority. The Minister expects this to result in a reduction of notifications by two thirds.

The thresholds for the requirement to notify the Norwegian Competition Authority of mergers will be raised from today’s NOK 50 million to NOK 1 billion for the companies combined and from today’s NOK 20 million to NOK 100 million for each of the companies involved. However, the Government intends to retain a right for the Competition Authority to carry out a control of any merger when “special circumstances” apply.

The proposal to raise the notification requirement thresholds was included in Official Norwegian Report no. 2012:7 (“A More Efficient Competition Law”) presented to the Ministry of Government Administration and Reform by the Competition Law Committee in 2012. The Competition Law Committee proposed amendments in three main areas of the law – control with mergers, the control power of the Norwegian Competition Authority and the enforcement of the behaviour regulation provisions.

The Administration Minister Rigmor Aasrud further confirmed that she intends to follow up on the committee’s proposal on other key issues, including proposals to simplify the process of merger notification and dawn raid rules in the event of suspicion of price-fixing etc.

The current legislation on notification of mergers states that every merger comprised by the present notification rules must be reported to the Competition Authority under a so-called general notification. It is then for the Competition Authority to decide whether the companies in question shall be ordered to give a complete notification. The notification process will now become a one step process where the only notification necessary – provided that the new and more liberal notification requirements apply – will be a the complete notification. This is expected to reduce the case consideration time with 15 days on average.

The rules regarding securing of evidence during raids will also be amended. The current legislation allows the Competition Authority to seize original documents and computers, making it difficult for the company or companies concerned to continue their daily operation and to counter the accusations. Therefore the committee has proposed that original documents only can be confiscated if it is assumed that the document has particular value as evidence. When this is the case, the company shall be given a copy of the document. The controlled company will also receive a copy of the confiscated electronic material. The controlled company will also be entitled to be present during the reviewing of the electronic material to clarify whether or not its content is subject to confidentiality according to the Criminal Procedure Act §§ 117-120.

Moreover, amendments of the rules of enforcement of the behaviour regulations in §§ 10 and 11 of the Competition Act 2004 will be enacted. Currently, the Competition Authority may impose a cease and desist order on an undertaking in breach of the Act. For the future, when the Competition Authority considers whether to impose an order on an undertaking, the undertaking itself may propose remedial measures. If the Competition Authority finds the proposal sufficient, it may close the case and make the proposal binding on the company.

The new rules are expected to be enacted during the spring of 2013.