Global Merger Control_SOCIAL

Global Merger Control Update | Fall 2022

This Jones Day Global Merger Control Update highlights significant recent developments and changes in merger control regimes. In this Update, we review: (i) key changes to merger regimes in Austria, Belgium, Bulgaria, Cambodia, China, the European Union, Germany, Italy, Mexico, Mozambique, Russia, Saudi Arabia, Singapore, Slovakia, South Korea, and Turkey; (ii) adjustments to the current notification thresholds in Argentina, Canada, Italy, Mexico, and the United States; and (iii) proposed changes to merger control rules in Australia, the European Union, Finland, Luxembourg, the Philippines, and the United Kingdom.

Lawyer Spotlight: Serge Clerckx

For 20 years, clients have benefited from Serge Clerckx's extensive experience in EU competition law and government regulation in a wide range of sectors, including consumer goods, pharma, aerospace, and technology. His competition practice covers merger control and antitrust. He represented a major manufacturer in the €7.5 billion sale of its rail business, and has led several recent multibillion-dollar merger cases. His antitrust practice includes complex investigations and private enforcement litigation. He also covers FDI and has extensive experience in regulated industries.

Serge, who is based in Jones Day's Brussels Office, speaks Dutch, English, French, and Spanish. He was recognized as a Thought Leader in Competition by Who's Who Legal (2022), Chambers, and Legal 500, and he regularly speaks at conferences and publishes on competition law. Serge is a guest lecturer at Sciences Po, Paris, and the Free University of Brussels. He also is the hiring partner for Brussels and is in charge of pro bono for the office.


 Austria Introduces Additional Filing Threshold

In September 2021, significant amendments to Austria's competition law entered into effect. These include a number of changes to the merger review procedure that should lead to lower scrutiny of foreign-to-foreign mergers, and greater alignment with the regime in place at European Union ("EU") level.

One notable change is the addition of an individual domestic turnover requirement to the set of revenue-based filing thresholds. Transactions may have to be notified to the Austrian Competition Authority if: 

  • The combined worldwide revenue of the parties exceeds €300 million (approx. US$354 million); 
  • The individual worldwide revenue of at least two parties exceeds €5 million (approx. US$5.9 million);
  • The combined Austrian revenue of the parties exceeds €30 million (approx. US$35.4 million); and
  • The individual Austrian revenue of at least two parties exceeds €1 million (approx. US$1.1 million).

The existing de minimis exemptions and transaction value set of thresholds are unaffected by the amendments. 

Other changes to the merger review process include the implementation of the Significant Impediment to Effective Competition ("SIEC") Test in Austria. This is the same standard the European Commission uses to challenge transactions it perceives to be anticompetitive but that do not necessarily create or strengthen a dominant position.

Austria and Germany Update Joint Guidelines on Value-Based Thresholds

In December 2021, the Austrian and the German competition authorities updated their 2018 guidelines on their respective transaction value filing thresholds. In those jurisdictions, even if the revenue-based thresholds are not met, transactions may be notifiable if: 

  1. The consideration exceeds €400 million (approx. US$473 million) in Germany, or €200 million (approx. US$236 million) in Austria; and 
  2. The target has "substantial domestic operations." 

The new guidelines clarify the scope of the transaction value thresholds, including how to calculate transaction values, and specific guidance on what amounts to "substantial domestic operations." Notable changes include an increase of the revenue-based criteria to determine whether a target has substantial domestic operations in either country. In Germany, the transaction value thresholds will generally not be met when a target's German turnover is less than €17.5 million (approx. US$20 million) (increased from €5 million). Austria increased that threshold from €500,000 to €1 million (approx. US$1.1 million).

Belgium Introduces Merger Control Filing Fees 

In February 2022, Belgium introduced filing fees for parties notifying transactions to the Belgian Competition Authority. Notifying parties now have to pay a filing fee of €52,350 (approx. US$62,000) under the normal review procedure, and of €17,450 (approx. US$20,600) when their transaction satisfies the criteria for a simplified procedure. 

Under the new rules the following parties are responsible for paying the filing fees: the acquirer in acquisitions, all merging parties in a merger, and the parent companies in a joint venture. 

Bulgaria Reforms Substantive and Procedural Merger Control Rules 

In February 2021, amendments to the Bulgarian Law on the Protection of Competition went into effect. The changes align Bulgarian merger control more closely with EU rules. 

Notable changes include the following:  

  • The amendments introduced the Significant Impediment to Effective Competition ("SIEC") test. The Bulgarian Competition Authority ("BCA") historically focused on dominance cases in merger review. The SIEC test allows intervention in cases where the BCA believes effective competition is "significantly impeded," despite the investigated merger not creating or strengthening a dominant position. A similar test is applied at EU level, and by a number of national competition authorities in Europe.
  • The BCA must now adopt a decision in problematic cases leading to a Phase 2 investigation in 90 working days, extendable by up to 40 working days.
  • The BCA now has five working days to make an initial verification for completeness of a filing form.

Cambodia Introduces its First Competition Laws 

In October 2021, Cambodia passed its first Law on Competition. The law includes a general prohibition of anticompetitive mergers and acquisitions. 

However, Cambodia has not yet adopted rules establishing procedures for its future merger control regime and, in particular, notification requirements, thresholds, and review timelines. 

China Introduces Power to "Stop the Clock" and Increases Fines for Failure to File

In August 2022, amendments to the Chinese Anti-Monopoly Law ("AML") went into effect. As detailed in our July 2022 White Paper, those changes include the introduction of a power for the State Administration for Market Regulation ("SAMR") to suspend the statutory review period, and substantial increases in fines for failure to make a required merger control notification. 

With the amendments, the SAMR accrued authority to "stop the clock," including in cases in which deal parties fail to submit documents and materials as required or when remedy proposals need to be further evaluated. This new power may exclude the need for parties to withdraw and refile merger notifications in complex cases in which statutory review periods expire before the SAMR completes its assessment of proposed remedies. On the other hand, in the absence of guidelines on how long the clock can be stopped, this new power may make it harder to predict the review timeline. 

In addition, the amended AML significantly increases the maximum fine for gun-jumping from 500,000 yuan (approx. US$77,500 or €65,500) to 10% of a company's prior fiscal year revenue in cases where transactions would have the effect of restricting competition. In the absence of anticompetitive effects, such a fine is capped at 5 million yuan (approx. US$775,000 or €655,000).

European Commission Guidelines Expand Antitrust Reviews to Non-Reportable Transactions

In March 2021, the European Commission ("EC") issued new guidelines ("EC Guidelines") encouraging EU Member State National Competition Authorities ("NCAs") to refer certain transactions to the EC for antitrust review, despite EC or any Member State filing thresholds not being met.

As detailed in our April 2021 Commentary, NCAs are now encouraged to refer to the EC acquisitions involving companies with little or no sales in the EU or any Member State if the acquisition target might be competitively significant in the future. This change is designed to address a perceived gap in EU antitrust enforcement, notably in tech, biotechnology, and pharmaceutical sectors.

Under Article 22 of the EU Merger Regulation, the 27 Member State NCAs have a wide discretion to refer transactions that: (i) affect trade between Member States; and (ii) threaten to significantly affect competition within the territory of the Member State or States applying for referral. The EC Guidelines, however, expand the circumstances in which NCAs can make, and the EC will accept, a referral. The EC Guidelines, now permit a referral where a Member State does not have jurisdiction and an acquisition target: 

  • Is a start-up or recent entrant with significant competitive potential that has yet to develop or implement a business model generating significant revenues (or is still in the initial phase of implementing such business model); 
  • Is an important innovator or is conducting potentially important research; 
  • Is an actual or potential important competitive force; 
  • Has access to competitively significant assets (such as raw materials, infrastructure, data, or intellectual property rights); and/or 
  • Provides products or services that are key inputs/components for other industries.

In April 2021, the EC accepted the referral of a non-reportable transaction in the medical testing business. This decision has been challenged before the EU General Court, which dismissed the appeal and confirmed the decision of the EC on July 13, 2022.

Italy Adopts Merger Control Reform

In August 2022, Italy adopted amendments to the existing antitrust laws, including provisions aligning Italy's merger review process with EU rules. 

The most notable changes include: 

  • The Italian Competition Authority ("ICA") may require notification of certain transactions that risk harm to competition, even if the thresholds are not met. This proposal is consistent with a larger trend among global competition authorities to screen transactions involving small targets that they perceive to be "competitively significant" in the future. 
  • Specific filing thresholds applicable to banks and financial institutions based on their revenue, as opposed to their assets.
  • Implementation of the Significant Impediment to Effective Competition ("SIEC") Test. This is the same standard the European Commission uses to challenge transactions it perceives to be anticompetitive but that do not create or strengthen a dominant position.

Mexico Revises Merger Control Guidelines

In April 2021, the Comisión Federal de Competencia ("COFECE") released revised merger control guidelines clarifying notification requirements for joint ventures ("JV") and the "failing firm" defense.

As indicated in a previous Alert, the new guidelines introduce factors to help JV parties determine whether Mexican merger control law requires a premerger notification to COFECE under the broad definition of a "concentration."

To determine whether a notification is necessary, COFECE will consider the duration, independence, and scope/effect (competitive impact) of the JV on a case-by-case basis. A filing is more likely to be necessary if: 

  • The JV is of permanent, long-term, or undetermined duration (compared to short-term agreements).
  • The parties create a new marketplace participant with operational autonomy with respect to marketing, prices, distribution, sales, financial, or other decisions.
  • The JV reduces or eliminates competition between the parties.

The new guidelines also set out elements that the parties must show when submitting a "failing firm" defense. Similarly, as in the U.S., the parties are required to show that (i) the company cannot meet its financial commitments; (ii) there is imminent risk that the company will exit the market; (iii) there are no reorganization alternatives; and (iv) the seller made good faith efforts to find an alternative buyer.

Mozambique's Competition Authority is Now Operational 

In the first quarter of 2021, the Mozambican Competition Regulatory Authority ("CRA") became operational and the merger notification forms were formally approved. The mandatory and suspensory merger control regime is now in full working order. 

Parties to transactions meeting one of the following three thresholds must notify the transaction to the CRA prior to closing: 

  • The parties' combined turnover in Mozambique exceeds 905 million Meticais (approx. US$13 million or €11 million), and each of at least two of the parties have revenue exceeding 105 million Meticais (approx. US$1.6 million or €1.3 million) in Mozambique; or
  • The transaction results in the acquisition, creation, or reinforcement of at least a 50% market share in Mozambique; or
  • The transaction results in the acquisition, creation, or reinforcement of at least a 30% market share in Mozambique, and each of at least two of the parties have revenue exceeding 105 million Meticais (approx. US$1.6 million or €1.3 million) in Mozambique.

Russia Raises Filing Threshold and Adopts First Merger Guidelines

In 2022, Russia increased the target-specific merger filing threshold. 

Under the previous rules, transacting parties had to notify the Russian Federal Antimonopoly Service ("FAS") of transactions when the following thresholds were met:  

  • The combined worldwide value of assets of the parties exceeds RUB 7 billion (approx. US$94 million or €83 million), or the combined worldwide revenue of the parties exceeds RUB 10 billion (approx. US$134 million or €118 million); and
  • The worldwide value of the target's assets exceeds RUB 400 million (approx. US$10.5 million or €4.8 million).

The amended rules have increased the second threshold for the target's assets to RUB 800 million (approx. US$11 million or €9.7 million). In addition, until 2023, if the target's assets are between RUB 800 million and RUB 2 billion (approx. US$27 million or €24 million), only a post-closing notification is required.

In June 2021, FAS adopted guidelines "on the specifics of state antimonopoly control over economic concentration." This is the first set of guidelines covering jurisdictional, procedural, and substantive aspects of the merger review process in Russia. 

The guidelines clarify the following issues related to the scope of merger control:

  • Methods to calculate the asset/revenue thresholds. In particular, the guidelines detail calculation of the revenue threshold specific to foreign-to-foreign mergers, i.e., the target must have a Russian turnover in excess of RUB 1 billion (approx. US$13.4 million or €11.8 million). 
  • Definitions and practical examples related to the concept of control, including what rights amount to negative control, a concept that previously lacked any clear definition. 

The guidelines also contain procedural clarifications, including on the pre-notification procedure, the types of documents and information to be provided, and parties' requests to access the FAS' file.

Finally, the guidelines provide an overview of the FAS' approach to the antitrust analysis of transactions. In particular, the guidelines distinguish whether a transaction qualifies as horizontal, vertical, or a conglomerate concentration. The FAS also identifies grounds for reviewing non-compete agreements contained in transaction documents. 

Saudi Arabia Adopts Merger Guidelines

In July 2021, the Saudi General Authority for Competition ("GAC") published Merger Review Guidelines intended to assist transacting parties to understand how the GAC will apply the merger control provisions of its recent competition law. This development coincides with increased merger enforcement in the Kingdom, as discussed in our December 2021 and June 2022 Alerts.

As indicated in a previous Update, the new Saudi Arabian Competition Law (Royal Decree M/75) went into effect in 2019. The Guidelines clarify jurisdictional, procedural, and substantive aspects of the Saudi merger review process. These guidelines parallel, to a large extent, the EU merger control rules.

The guidelines: 

  • Clarify GAC's jurisdiction to review transactions, including details on the definition of an economic concentration, and how GAC and parties should calculate jurisdictional thresholds. In particular, the guidelines confirm that joint ventures, which perform on a lasting basis all the functions of an autonomous economic entity (i.e., "full-function" joint ventures), are reportable. 
  • Detail the procedural requirements for notifying transactions, including the required documents. The guidelines also establish the notification fee at 0.02% of the parties' aggregate total annual sales, with an upper limit of SAR 400,000 (approx. US$107,000 or €90,000).
  • Describe the substantive review test that GAC will apply. GAC will apply a competition test that considers whether the transaction will have the effect or likely effect of "substantially lessening competition" in a relevant market. The guidelines also detail the relevant factors that the GAC considers in assessing whether transactions are anticompetitive. 
  • Detail the principles and processes GAC will use in determining appropriate remedies.

In addition, in April 2022, the Kingdom of Saudi Arabia agreed to the Convention of October 5, 1961, Abolishing the Requirement of Legalisation for Foreign Public Documents. When that change takes effect on December 7, 2022, it will eliminate the time consuming process of obtaining authenticated documents, including a legalized power of attorney, for GAC merger filings. Instead, going forward, the power of attorney will require an apostille.  

Singapore Updates Merger Guidelines

The Competition and Consumer Commission of Singapore ("CCCS") adopted new merger guidelines that took effect in February 2022. 

The new guidelines clarify a number of procedural and substantive rules related to Singapore's voluntary merger control regime, including the CCCS' review timeline, the CCCS' powers of investigation, and the risks of not notifying a merger that could be deemed to give rise to competition concerns. 

The guidance also retains critical jurisdictional safe harbors that provide transacting parties with guidance about how to file voluntarily with the CCCS. Under the safe harbor, the CCCS is unlikely to consider a merger to give rise to competition concerns unless it meets the following indicative thresholds:

  • The merged entity will have a market share of 40% or more; or 
  • The merged entity will have a market share of between 20% to 40% and the post-merger combined market share of the three largest firms in the market is 70% or more.

Slovakia Rescinds Specific Merger Control Threshold for Joint Ventures

In June 2021, the new Act on Protection of Economic Competition went into effect. The act abolished a notification threshold specific to the creation of joint ventures, which led to notification to the Slovak Antimonopoly Office ("AMO") of a large number of foreign-to-foreign joint ventures. Under the prior rules, if at least one of the parties creating the joint venture had turnover in Slovakia exceeding €14 million (approx. US$15.9 million), and the other generated worldwide turnover in excess of €46 million (approx. US$52.5 million), the creation of the joint venture was subject to notification in Slovakia.

The AMO now reviews joint ventures under its general notification thresholds:

  • Combined revenue in Slovakia of the parties of at least €46 million (approx. US$54.4 million), and each of at least two parties had revenue in Slovakia that exceeded €14 million (approx. US$16.5 million), or 
  • Turnover in Slovakia of (a) at least one merging party; or (b) the party being acquired, exceeded €14 million, and the worldwide revenue of the other party exceeded €46 million.

Other changes to Slovakian merger control procedure include new powers for the AMO to impose interim measures in cases of gun jumping or breaches of remedies. 

South Korea Introduces New Transaction Value Notification Threshold 

In a move to review transactions including "high value" businesses that do not generate significant revenue, South Korea introduced a new alternative notification threshold based on transaction value, similar to the thresholds introduced in Germany and Austria in 2017. 

Under the new rules, acquisitions of targets with sales or assets worth less than KRW 30 billion may be reportable if the transaction value exceeds the threshold. A merger notification will be required if :

  • The transaction value is at least KRW 600 billion (approx. US$524 million or €443 million); and 
  • During the three preceding years, the target sold or provided products or services to at least one million people per month in Korea, or has either leased R&D facilities or used R&D personnel in Korea and has had an annual R&D budget of at least KRW 30 billion for Korea.

Additionally, the Korea Fair Trade Commission released revisions to the merger guidelines. These include rules on transaction value calculation and criteria to assess the significance of the target's activities in Korea.

Turkey Significantly Raises Revenue Thresholds

In March 2022, Turkey amended the Communiqué No. 2010/4 on Mergers and Acquisitions, significantly raising the turnover thresholds for transactions requiring authorization from the Turkish Competition Board. 

Under the amendment, parties must notify a transaction in Turkey if:  

  1. The total Turkish revenue of the transacting parties exceeds TRY 750 million (approx. €71.6 million; US$84.3 million) (up from TRY 100 million), and the Turkish revenue of at least two of them separately exceed TRY 250 million (approx. €23.9 million; US$28.1 million) (up from TRY 30 million); or
  2. The Turkish revenue of the assets or businesses being acquired in acquisition transactions, and of at least one of the parties in merger transactions, exceeds TRY 250 million (approx. €23.9 million; US$28.1 million) (up from TRY 30 million), and the worldwide revenue of the other party exceeds TRY 3 billion (approx. €286.5 million; US$337.4 million) (up from TRY 500 million).

The amendment also introduces a significant change for "technology companies." The local threshold above (i.e., revenue or assets in Turkey exceeding TRY 250 million) will not apply to acquisitions of "technology companies," defined to include digital platforms, and entities active in software, financial, biotechnology, pharmacology, agrochemicals and health technologies, and which operate or carry out R&D activities in Turkey or offer services to users in Turkey. That is consistent with the trend among global competition authorities to focus on acquisitions of low-revenue, highly valued tech start-ups. 


Argentina Adjusts Merger Control Thresholds

In February 2021, Argentina updated its merger control thresholds: a merger control filing is required in Argentina if the combined aggregate turnover of the merging parties for the preceding fiscal year exceeds 100 million adjustable units (AR$8,345 million, or approximately US$81.2 million or €71.7 million).

Transactions are exempt from notification if the value of the transaction, and the value of assets to be merged, acquired, transferred, or controlled in Argentina each do not individually exceed AR$ 1,669 million (approximately US$16.2 million or €14.3 million). That exemption does not apply if, within the same relevant market: (i) there had been economic operations that jointly exceed AR$ 1,669 million during the preceding 12 months; or (ii) there had been economic operations that jointly exceed AR$ 5,007 million (approximately US$48.7 million or €43.0 million) during the preceding 36 months.

Canada Decreases Merger Control Thresholds 

In February 2021, the Canadian Competition Bureau ("CCB") decreased the merger filing threshold relating to the size of the transaction from CA$96 million to CA$93 million (approx. US$73 million or €64 million). 

Parties must generally notify transactions to the CCB when:

  • The target's assets in Canada or revenues from sales in or from Canada generated from those assets exceed CAD$ 93 million, and 
  • The combined Canadian assets or revenues of the parties and their respective affiliates in, from, or into Canada exceed CAD$400 million (approx. US$315 million or €277 million).

Italy Adjusts Merger Control Thresholds

In March 2022, the Italian Competition Authority ("ICA") updated the revenue thresholds that trigger the obligation to pre-notify a transaction to the ICA. 

In Italy, transacting parties must now notify transactions that meet the following cumulative conditions: 

  • The combined revenue of the parties in Italy exceeds €517 million (approx. US$611 million); and 
  • The individual revenue of at least two parties involved exceeds €31 million (approx. US$36 million).

Mexico Updates Merger Control Thresholds

In February 2022, new merger control thresholds went into effect in Mexico. Subject to an exception, a merger filing will be required in Mexico if any of the following three thresholds are met:

  • The value of the transaction in Mexico exceeds 18 million adjustable units (MXN 1,731 million, or approx. US$84 million, or €74 million); or 
  • The transaction results in the acquisition of at least 35% of the assets or shares of an economic agent whose assets value in Mexico or annual sales originating in Mexico exceed 18 million adjustable units (MXN 1,731 million, or approx. US$84 million, or €74 million); or
  • The transaction results in the acquisition of assets or capital stock in Mexico in excess of 8.4 million adjustable units (MXN 808 million, or approx. US$39 million or €34 million), and, at least two parties have individual or combined sales or assets in Mexico in excess of 48 million adjustable units (MXN 4,618 million, or approx. US$225 million or €199 million).

The United States Updates Merger Control Thresholds

As detailed in our January 2022 Alert, the Hart-Scott-Rodino ("HSR") Act thresholds increased in 2022, marking the first time the lowest U.S. threshold will exceed $100 million.

Until the next adjustment in early 2023, an HSR filing may be required if an acquirer will hold, as a result of a transaction, voting securities, non-corporate interests, and/or assets of an acquired person valued in excess of US$101.0 million (approx. €85.4 million).

 If the Size-of-Transaction is between US$101.0 million and US$403.9 million (approx. €341 million), the transaction also must satisfy the Size-of-Person threshold, i.e., either the acquired or acquiring person has annual net sales or total assets of at least US$202.0 million (approx. €170 million) and the other party to the transaction has at least US$20.2 million (approx. €17.0 million) in annual net sales or total assets. 

Transactions valued in excess of US$403.9 million need not satisfy the Size-of-Person threshold. 


Australia Proposes Substantial Changes to Merger Control

In 2021, the Australian Competition & Consumer Commission's ("ACCC") introduced a number of proposals which, if implemented, would increase antitrust M&A scrutiny in Australia. 

As detailed in our September 2021 Commentary, the now-departed ACCC chairman voiced concern about increased market power and concentration in the industry in Australia and that Australia's current voluntary and largely non-suspensory merger review regime was inadequate to address allegedly anticompetitive mergers. To address that perceived shortcoming, the proposed changes would introduce the following:  

  • Substituting the current regime with a mandatory and suspensory merger notification and review process for all proposed merger or acquisition transactions above a yet to be defined threshold;
  • Additional factors that the ACCC and court would consider including whether the acquisition may result in the loss of potential competitive rivalry or increase access to or control of data, technology, or other significant assets;
  • Reversing the onus of proof in the test for clearance, which presently requires the ACCC to establish that the transaction would have, or is likely to have, an anticompetitive effect;
  • A "call-in" power that would allow the ACCC to review certain sub-threshold mergers;
  • Reframed clearance test so that there is a presumption that transactions involving a party holding "substantial market power" would be deemed to substantially lessen competition. To obtain clearance, the transaction parties would have the burden to rebut the presumption and the default position will be denial of clearance; and
  • Specific rules, including special thresholds and a new substantive antitrust test, governing acquisitions by "large digital platforms."

Public consultation on the proposed changes is anticipated during 2023 with possible introduction of any legislated change in late 2023/early 2024. 

European Commission Consults on Expanding the Scope of the Simplified Merger Review Procedure

In May 2022, the European Commission ("EC") launched a public consultation on draft procedural legislation and guidance expanding the scope of the simplified merger review procedure (the "simplified procedure"). 

Filings under the simplified procedure face significantly reduced information disclosures and the EC typically clears cases within a timeframe shorter than the applicable statutory 25-working day period. 

This consultation is the latest stage of a long-lasting evaluation of procedural and jurisdictional aspects of EU merger control, which notably resulted in identifying additional cases that are typically unproblematic and that the existing simplified procedure fails to capture. 

The most notable changes include: 

  • Adding new categories of transactions suitable for simplified procedure treatment, including certain transactions creating vertical links;
  • Introducing a flexibility clause that grants the EC discretion to reclassify transactions filed under the normal procedure to the simplified procedure under certain conditions; and
  • Introducing a streamlined filing form for simplified cases, in a "tick-the-box" format.

The EC plans to launch the new rules in 2023. 

Finland Proposes Lower Merger Notification Thresholds

In June 2022, Finland's Ministry of Economic Affairs and Employment ("MEAE") published a draft bill that includes lower merger notification thresholds. These would result in more notifications in Finland. 

Under the existing rules, transacting parties must notify the FCCA where the combined global revenue of the parties exceeds €350 million (approx. US$413 million) and the domestic revenue of at least two of the parties exceeds €20 million (approx. US$23 million). 

The MEAE proposes to replace the global revenue threshold with a threshold based on the parties' combined domestic revenue. If adopted, transactions where the parties' combined domestic revenue exceeds €100 million (approx. US$118.2 million), and the domestic revenue of at least two of the parties exceeds €20 million, would have to be notified. 

These proposed changes could take effect in early 2023.

Luxembourg Consults on the Creation of a Domestic Merger Control Regime

All EU Member States except Luxembourg have a domestic merger control regime in place. In January 2022, a public consultation procedure was launched with the aim of gathering views on the features of a potential merger control regime. 

 A July 2022 report specifies that the drafting stage of a future merger control regime has started, with the aim of submitting a first draft to parliament in spring of 2023. It is therefore unlikely that a merger control regime in Luxembourg will be adopted before the end of 2023. 

The Philippines Considers Increasing Filing Thresholds

A bill approved by a legislative committee in July 2021 would establish higher mandatory filing thresholds introduced by the Philippines' COVID-19 recovery plan. 

As noted in our previous Update, temporary higher mandatory filing thresholds are in place until September 15, 2022. Transacting parties must notify the Philippine Competition Commission ("PCC") if they satisfy both the size-of-party and the size-of-transaction tests, which are both set at PHP 50 billion (approximately US$965 million or €862 million).

Those thresholds are significantly higher than the general filing thresholds set at PHP 6 billion (approx. US$120 million or €106 million) for the size-of-party test, and PHP 2.4 billion (approx. US$48 million or €42 million) for the size-of-transaction test.

The PCC opposes the bill, and has indicated it would make submissions to limit the higher thresholds to only certain sectors (e.g., energy and manufacturing).

The United Kingdom Publishes Merger Control Reform

In July 2021, the UK Government introduced proposals for far-reaching reforms to its merger control regime, with a view to increasing the CMA's authority to review transactions in the digital sector. Following a period of consultation, the UK Government announced in April and May 2022 a set of proposed measures that it will now take forward. 

The UK government has not acted on earlier CMA proposals to shift from the current voluntary notification regime to a mandatory notification system. However, the proposed changes include revised jurisdictional thresholds, one of which would expand the CMA's powers to review transactions. 

Under the existing rules, the CMA has jurisdiction to review transactions in which the UK revenue of the target exceeds £70 million (approx. US$96 million; €81 million), or when the transacting parties supply or purchase at least 25% of goods or services of the same description in the UK and the merger increases that share. 

The proposed rules would:

  • Raise the target-specific UK revenue threshold to £100 million (approx. US$131 million; €118 million); 
  • Introduce a small mergers safe harbor exempt transactions in which each party's worldwide revenues do not exceed £10 million (approx. US$13.1 million; €11.8 million); and
  • On a more interventionist note, introduce an additional unilateral share of supply test in which the CMA would have jurisdiction to review transactions if any party has both a share of supply of at least 33% in the UK, and UK revenue exceeding £350 million.

According to the government, the latter change would allow the CMA to review mergers involving larger companies acquiring potential new entrants without existing overlapping activities (i.e., nascent acquisitions or so-called "killer acquisitions"—which have been a particular concern in tech sectors). 

Similarly focusing on tech markets, the UK government also proposes a merger reporting requirement for "large" tech companies designated as having "Strategic Market Status" (i.e., substantial and entrenched market power, in at least one digital activity, which provides the firm with a strategic position). Upon such designation by the new Digital Markets Unit within the CMA, those companies would have to report in advance transactions meeting certain jurisdictional thresholds, allowing the CMA the opportunity to undertake an initial review of the merger to consider whether it would warrant further investigation. 

Designated tech companies would have to report deals before consummation when: (i) the Designated company acquires over a 15% equity or voting share after the transaction; (ii) the value of the Designated company's holding exceeds £25 million pounds (approx. US$33.7 million, €29.7 million); and (iii) the transaction meets a UK nexus test.

The proposal also would formalize on a statutory basis the ability for parties to request a "fast track" to an in-depth Phase II review, i.e., a new procedure to skip over a Phase I review. Under this procedure, the parties to a transaction would concede at an early stage that the transaction "may" result in a "substantial lessening of competition," i.e., that the legal test for a reference to Phase II was met, and the CMA would then quickly proceed to open an in-depth Phase II review in order to determine whether that is the case. The change is intended to do away with potentially overlapping and duplicative review procedures across Phase I and Phase II, in order to decrease the overall length of CMA reviews in transactions that raise sufficient competition issues to require an in-depth review.

Insights by Jones Day should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request permission to reprint or reuse any of our Insights, please use our “Contact Us” form, which can be found on our website at This Insight is not intended to create, and neither publication nor receipt of it constitutes, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.