Merger control is a cornerstone of competition law, referring to the regulatory assessment process by competent authorities to ensure that proposed mergers and acquisitions which exceed the thresholds provided under the law, do not substantially lessen competition in the relevant market. In Cyprus, merger control is governed by the Control of Concentrations Between Undertakings Law (L.83(I)/2014) (the “Law”) and is enforced by the Commission for the Protection of Competition (“CPC”).
This article provides an overview of the notifications submitted in Cyprus, the role of the CPC, and the key legal requirements to be considered when businesses engage in major transactions such as mergers and acquisitions.
The role of the Commission for the Protection of Competition
The CPC is the national authority responsible for enforcing competition rules in Cyprus. It plays a crucial role in reviewing proposed concentrations to ensure they do not distort market competition. The CPC is empowered to investigate all competition concerns, review merger notifications, impose administrative fines and issue decisions to protect consumer welfare and promote economic growth.
Key concepts and notification requirements
In competition law, the term “undertaking” broadly refers to any entity engaged in economic activity, regardless of its legal form or the way it is financed. Generally, an entity is considered to be engaged in an economic activity when it offers goods or services in a given market regardless of whether it is for profit or not.
A concentration of major importance must be notified to and cleared by the CPC prior to its implementation, known as the ex-ante notification obligation. The notification is submitted following the conclusion of the agreement or prior to its conclusion through demonstrating to the CPC the existence of a bona fide intention to enter into such an agreement.
A concentration is considered to be of major importance and subject to mandatory notification to the CPC when:
a. The aggregate worldwide turnover achieved by each of at least two of the concerned undertakings exceeds EUR 3,500,000;
b. At least two of the concerned undertakings achieve a turnover in Cyprus; and
c. At least EUR 3,500,000 out of the aggregate turnover of all concerned undertakings is achieved in Cyprus.
What happens after a decision is issued?
Once a decision is issued, the parties may submit a confidentiality request to exclude sensitive information from publication. The CPC then publishes a redacted (non-confidential) version of the decision in the Official Gazette and on the CPC’s website. This procedure ensures transparency and protection of confidential information.
Conclusion
Compliance with merger control rules is essential to maintain a competitive market and prevent anti-competitive practices. A functional competitive market leads to lower prices, diversified goods and innovation.
Failure to comply with the Law, including failure to obtain clearance prior to the implementation of transactions subject to a notification requirement, may result in significant penalties imposed by the CPC, including:
- Administrative fines of up to 10% of the undertaking’s worldwide turnover;
- Fines of up to fifty thousand (€50,000) for providing misleading or false information, and
- An order for the dissolution or partial dissolution of the concentration
The information in this article does not and is not intended to constitute legal advice. For advice specific to your situation, please contact one of the qualified legal professionals at our firm.
