PROPOSAL FOR THE AMENDMENT OF THE CYPRUS COMPETITION LAWS
The Cyprus Commission for the Protection of Competition (“CPC”) had launched a public consultation procedure last month, inviting any interested parties to make comments and submit suggestions on two draft amending legislations for the amendment of the Law on the Protection of Competition (the “Competition Law”) and the Law on the Control of Concentrations Between Undertakings (the “Merger Law”).
The aim of the proposed amendments to the Competition Law is to improve the existing framework for the application of the national and EU competition rules and to extend the investigative and enforcement powers of the CPC. One other important aspect of the proposed amendments to the Competition Law is the enhancement of private enforcement proceedings as regards actions for damages and the transposition into national law of certain of the provisions of the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (COM/2013/0404 final – 2013/0185 (COD). The proposed amending legislation also repeals section 6(2) of the Competition Law which prohibits the abuse of a relationship of economic dependence, for which a similar prohibition does not exist under EU competition rules.
As regards the proposed amendments to the Merger Control Law, it is important to state that the strict one week deadline for filing the relevant notification with the CPC will now be abolished. Furthermore, the substantive test for determining whether a concentration is compatible or not with the competitive market will be amended through the introduction of “substantial lessening of competition” element in the factors to be taken into account when assessing a concentration, thus moving away from the previous test of the “creation or enhancement of a dominant position”.
It is important to also note that the CPC has attempted to revise and/or amend the minimum requirements / tests for rendering a concentration subject to notification and clearance by the CPC as a means of exempting foreign-to-foreign transactions which are not directly related to Cyprus. The turnover thresholds however, have remained the same as before (€3.500.000) which in our view, would still result in foreign-to-foreign transactions been subject to notification and clearance by the CPC. One other important change which will be introduced will be the payment of a filing fee of €1000 for all concentrations notified to the CPC. An additional fee of €6000 will also need to be paid in the event that a full investigation (Phase II) will need to be carried out by the CPC. The introduction of the aforementioned fees coupled with the continuation of the very low turnover thresholds, are in our view the major drawbacks of the proposed amendment to the Merger Control Law.