Authors: Róbert Neruda, Lenka Gachová, Tomáš Varšo

The Antimonopoly Office of the Slovak Republic (the “AMO”) has submitted a draft of a completely new Competition Act (the “Draft”) to the inter-ministerial comment procedure (the “ICP”). You can read about the plan to submit a new Act instead of a simple amendment to the current one on our blog,[1] where we described why the AMO is going this direction. In this issue of Competition Flash, we will briefly present to you the most fundamental change in terms of content which the Draft entails.

New notification criterion

If you currently contact a lawyer at the beginning of the planned transaction with a question whether you will have to notify the AMO, your conversation will revolve mainly around the turnovers of the participating undertakings. If you already have this experience, you know that the current turnover thresholds for the obligation to notify a transaction are relatively high (EUR 46 million and EUR 14 million for the territory of the Slovak Republic and worldwide, respectively).

However, much smaller undertakings will also probably have to be vigilant after the Draft comes into effect. The Draft brings about a new notification criterion partly independent of the turnovers of the parties involved. As proposed in the Draft, in connection with the new notification criterion, it should be necessary to notify a concentration also in the form of a request for an opinion on whether the concentration is subject to approval by the AMO.

The obligation to submit a request for an opinion should arise if two conditions are met - at least two parties to the concentration have a turnover of more than EUR 4 million in the Slovak Republic and their separate or common market share in any alternative of the relevant markets affected by the transaction (horizontal or vertically related) is at least 40%.

If you have experience with the definition of the relevant markets by competition authorities, you know that this is often a relatively time-consuming and information-demanding exercise with a high level of uncertainty about the conclusion of such an exercise. Undertakings often do not agree with the competition authority on the definition of the relevant markets. The authorities tend to define markets more narrowly, thus indicating higher market shares of the parties concerned. Thus, many undertakings will be careful to consider the narrowest possible definition of the relevant market, which will lead to a higher frequency of requests for opinions. All this can significantly slow down the transactions themselves, not only due to the demanding preparation of documents and legal uncertainty, but also due to the additional deadline for issuing an opinion, which is the same as that for the current standard assessment - 25 business days. The risk of not requesting the AMO’s opinion is high, as it is associated with a fine of up to 10% of turnover.

The new notification criteria will thus probably significantly complicate the assessment of the obligation to notify the AMO of the transaction and will lead to an increase in the number of interactions with the AMO within the acquisition activity. In other words, undertakings will have to go to the AMO more often than today, either with a notification or a request for issuing an opinion.

There is much more

The Draft also contains other fundamental changes that will affect the overall powers of the AMO and the proceedings before it. These changes (e.g. modification of time limits for imposing a fine and related procedural time limits, restriction of inspection of the file by persons other than the parties to the proceedings, modifications in blacklisting, and many other significant changes) will of course be commented on as part of the ICP, in which you, as the general public, can also participate by 6 November 2020.[2]

If you are interested in the changes in the Draft and the overall developments of its adoption, you can look forward to a series of blogs called the “New Competition Act in a nutshell”, in which experts from our law firm will present to you individual changes in their broader context and impact. For regular service, just follow our blog (https://www.havelpartners.blog/) and LinkedIn of our Slovak office (https://www.linkedin.com/company/havel-partners/).

[1] P Access to the Draft as part of the ICP is available from: https://www.slov-lex.sk/legislativne-procesy/SK/LP/2020/284

[2] Available at: https://www.havelpartners.blog/blog/revolucia-slovenskeho-sutazneho-prava-v-tieni-pandemie/122