Barbados has been making significant progress in its efforts towards removing major longstanding cultural, social and economic problems. The Barbadian economy has long suffered from under-development particularly in financial and credit markets. The enactment of a new competition law and the establishment of a new competition authority have been part of a wider effort to enhance technical and business knowledge, protect consumers and improve enterprise and productivity.

Relevant legislation and statutory standards

Mergers are regulated under section 20 of the Fair Competition Act 2002–2019 (Chapter 326C) (FCA2002 or ‘the Act’) which prohibits any relevant merger unless specifically pre-approved by the Fair Trading Commission. The law therefore requires prior notification and approval for all mergers satisfying certain size thresholds.

Decision-making bodies and enforcement authority(ies)

The Fair Trading Commission (‘the Commission’) is an independent body – created on 2 January 2001 pursuant to section 3 of the Fair Trading Commission Act (CAP. 326B) – responsible for assessing and investigating mergers in Barbados and determining whether they comply with the terms of the FCA2002. The Commission may also direct that a given merger be subject to an assessment by it. Its responsibilities under the Act include the following:

• promotion and maintenance of fair competition;

• investigating the conduct of trade to prevent practices contravening the Act;

• review of commercial activities to ensure prevention or termination of practices adverse to the interests of consumers;

• taking necessary action to prevent abuse of a dominant position, eliminate anti-competitive agreements and control mergers;

• advising the Minister responsible for Commerce and Consumer Affairs on matters of operation of the Act;

• other functions required to give effect to the Act.

Despite concerted governmental efforts directed at improving Kenya’s economy, the country still faces significant hurdles to achieving consistent economic growth. Indeed a Report prepared by the Organisation for Economic Co-operation and Development (OECD) in 2003 stated that Kenya’s economic performance remains well below its potential. Clearly, this can be expected to affect the development of competition law and policy in the country and on the whole it has done so.

Relevant legislation and statutory standards

Mergers and acquisitions in Kenya are governed by Part III of the Restrictive Trade Practices, Monopolies and Price Control Act, Chapter 504, Laws of Kenya 1989 (hereinafter referred to as ‘the RTPMPCA1989’ or ‘the Act’). The Act is in place to encourage a healthy system of competition, by reducing participation in restrictive trade practices and controlling monopolies and concentrations of economic power. In general, any agreements or trade associations featuring the following are defined as restrictive trade practices which shall not be enforceable in legal proceedings:

• Refusal and discrimination in connection with the sale or supply of goods.

• Resale price maintenance.

• Price discrimination.

At the start of the 1990s, the Peruvian government implemented a profound macroeconomic stabilisation and structural adjustment programme that led to the abandonment of all forms of import-substituting industrialisation policies, eliminated price controls, freed the exchange rate and interest rates, liberalised trade, gave equal treatment to foreign investors, initiated a comprehensive tax reform and redefined the state’s involvement in the economy, moving it away from the role of directly producing goods and services and towards the role of supervisor and regulator of private actors and privatised companies in a competitive environment.

Among the pillar reforms implemented, between November 1991 and late 1992, Peru enacted for the first time legislation on competition, consumer protection, commercial advertisement and unfair competition, all of which had a primarily facilitative function of bringing into being and strengthening competitive markets.

Consolidating these reforms, the Peruvian Political Constitution of 1993 adopted a social market economy model, based on the recognition and protection of fundamental individual economic freedoms (i.e. free trade and freedom of enterprise, freedom of contract, property rights, equal treatment of domestic and foreign investment, among others) and the subsidiary role of the state in economic activities. Within this framework, Section 61 of the Peruvian Constitution proclaims that ‘the State combats all practices that limit [competition] and the abuse of dominant or monopolistic positions in the marketplace’, explicitly prohibiting the authorisation or establishment of monopolies through laws or cartels. Interpreting this constitutional provision, the Peruvian Constitutional Tribunal has afirmed that the acquisition of a dominant position or a monopoly through the legitimate means of the competitive process is not in itself illegal.

Costa Rica has witnessed an interesting economic transition since the early 1990s, with more efforts being directed at making the country an attractive destination for tourists and a lucrative investment opportunity for foreign hi-tech firms following many years of focus originally on the production of bananas and coffee and, later, in textile drawback operations.

Several key sectors are still controlled by state monopolies, although some considerable political efforts have been made over the last 4 years or so to privatise as many sectors as possible. The latest and perhaps the most relevant effort, has been the liberalisation of the telecommunications market as a result of the Free Trade Agreement with the Caribbean and United States. Of course, the success of these privatisation efforts will have a direct impact on the role and standing of competition law and policy in Costa Rica, including the country’s mechanism for merger control.

Relevant legislation and statutory standards

Merger and acquisition activities are regulated under the Law on Promotion of Competition and Effective Defence of the Consumer1 (‘the Act’). The Act is supplemented by the Regulations of the Law on Promotion of Competition and Effective Defence of the Consumer2 (‘the Regulations’). In post-merger and acquisition situations, in which the right to private enforcement and the right to appeal arise, the provisions of the General Law of Public Administration3 and the Law for the Regulation of Jurisdiction on Administrative Law4 apply respectively (see below).

The Republic of Cyprus has a well-documented history of conflict concerning, largely, the legitimacy of its government and the relationship of its populace to influential mainland powers. Since the 1974 invasion of the north part of the island by the Turkish army resulting in a de facto division of the island into the Turkish Republic of North Cyprus (recognised only by Turkey) and the internationally recognised Greek Cypriot administration in the south (which claims dominion over the whole republic), the economy of the island as a whole has suffered from foreign investors’ reluctance to invest in a ‘war zone’ and has faced immeasurable lost trading opportunities arising out of the UN-maintained ‘buffer zone and demarcation line’. Furthermore, until recently North Cyprus faced a European Union (EU) trade embargo which greatly weakened its economy.

The goal of acceding to the EU has been part of a longstanding struggle to bring peace and economic stability to the troubled island and to define its identity on the world stage. European countries have been understandably eager to settle the internal conflict before admitting the country to the EU (not least to avoid undermining relations with Turkey). The European Council resolved in 2002 to admit Cyprus as a whole if the North and South could reach a UN-brokered solution by 28 February 2003. Failing that, the application of North Cyprus would be suspended. The settlement foundered when simultaneous referenda were put forward on 24 April 2004 and passed by North Cyprus but rejected by the Greek Cypriots. The latter therefore acceded to the EU on 1 May 2004, while the former remains outside as, according to the EU, ‘areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control’. The EU subsequently decided to put an end to the isolation of the Turkish Cypriot community and to facilitate the reunification of Cyprus by encouraging the economic development of the Turkish Cypriot community. On 7 July 2004, the European Commission announced draft regulations aimed at the following: establishing financial support and encouraging contacts between the two communities; facilitating direct trade with the north with a preferential import regime; defining special rules for intra-island trade and authorising the Turkish Cypriot Chamber of Commerce to certify import items.

The field of competition law in general and the area of merger control in particular have received particular attention in recent years in the Russian Federation. Several factors have facilitated this. Most importantly, since the 1990s, the Government has come to place considerable emphasis on the economic development of Russia and to understand that effective competition law and policy is a major key to success. Additionally, the close ties which Russia has been building with the European Union (EU) (most notably the signing of the Partnership and Co-operation Agreement in 1994) have enhanced the role of competition law in the economy. A third facilitating factor to be mentioned is the process of globalisation, which has a direct impact on Russia’s regime of merger control, given the number of merger operations worldwide which have proved capable of affecting domestic markets in Russia and the conditions of competition there. These factors, amongst others, have highlighted the importance of strengthening Russia’s system of competition law in general and its merger control regime in particular. Important legislative and enforcement efforts have been made over the years, though the system still suffers from significant bureaucratic hiccoughs and legislative shortcomings.

Primary legislation

There are several principal instruments of primary legislation governing merger control in Russia. These are as follows: Law of the Russian Soviet Federative Socialist Republic No 948–1 of 22 March 1991 on Competition and Limitation of Monopolistic Activity on Commodities Markets, as amended in October 2002 (the ‘Competition Law’); Federal Law No 147-FZ of 17 August 1995 on Natural Monopolies, as amended in January 2003; and Federal Law No 117-FL of 23 June 1999 on the Defence of Competition on Financial Services Markets, as amended in December 2001.

Preface

The aim of Merger Control Worldwide is to provide a detailed, comprehensive overview of the substantive and procedural merger control laws around the world. The original aim was to have a wider jurisdictional coverage. However, following careful consideration, we considered it unnecessary to provide a dedicated chapter in the case of some jurisdictions, either because they have nascent merger regimes or because the application of their competition law provisions to merger transactions appears to be somewhat theoretical.

Preparing this edition has been a great experience for both of us. We have very much enjoyed working with our contributors, to whom we are extremely grateful for agreeing to become involved and for producing extremely interesting and top-quality chapters. As with the first edition, we are planning to produce regular annual supplements in order to capture all changes occurring in the different merger control regimes covered in this work and also to add separate chapters of new regimes as they emerge or of current nascent ones should these develop in the near future.

Zambia has shown a strong interest in developing an effective competition policy both nationally and within the Common Market for Eastern and Southern Africa (COMESA). It has been active in seeking the expertise of foreign competition law specialists, co-operating with other countries in the region and forging close contacts with the European Union (EU) and the United Nations Conference on Trade and Development (UNCTAD) aiming at receiving technical assistance in the field of competition law.

Relevant legislation and statutory standards

Mergers and takeover activities are regulated under the Competition and Fair Trading Act 1994 (hereinafter referred to as ‘the CFTA’ or ‘the Act’). The CFTA was enacted by the Parliament of the Republic of Zambia in 1994 and came into force on 15 February 1995. The merger control provisions apply to any merger operation, which entails the establishment of control or acquisition of a substantial interest in the whole or part of a business of a competitor, supplier, customer or any other person.

In effect, the Act calls for mandatory pre-notification to the Zambia Competition Commission (ZCC) in order to obtain authorisation for any proposed merger or takeover that involves enterprises (undertakings) operating in related markets or industries. An offence is committed under the Act where a merger is effected between two or more independent enterprises, which manufacture or distribute goods that are substantially similar or provide substantially similar services (horizontal mergers).

Due to the unreliable nature of data and information published by the Government of the Republic of Uzbekistan, it is not really possible to arrive at an accurate assessment of the performance of the national economy. However, the general consensus is that Uzbekistan faces deep-rooted economic, political and social problems. Given the history and geographical location of the country, one might expect competition law and policy to be wholly absent from the national agenda in Uzbekistan. On the contrary, however, Uzbekistan has a system of competition law which includes a mechanism for merger control.

Relevant legislation and statutory standards

Merger and acquisition activities are regulated principally under the Law of the Republic of Uzbekistan on Competition and Restriction of Monopolistic Activity, which was enacted in 1996 (hereinafter referred to as ‘the CRMA Law’ or ‘the Law’). The CRMA Law is primarily concerned with preventing, restricting and suppressing monopolistic conduct, and it aims to protect and foster the appropriate conditions for the formation and effective functioning of competition within the market structure. The CRMA Law regulates relations which give rise to competition issues, and it applies to actions and agreements which potentially or actually result in the restriction of competition (or other negative consequences). Agreements or co-ordinated action linked to the following behaviour are considered to limit competition and are expressly forbidden, and such agreements are declared completely or partially void:

• any type of price-fixing scheme or agreements involving resale price maintenance that obstruct the establishment of real market prices;

• price discrimination;

• control over or co-ordination of production, markets and capital investments;

• division of the market by territorial principles, by volume of sales or purchases, by assortment of goods, by number or range of the sellers or buyers, by customers;

• creation of barriers to entry or elimination of competitors.

China has a mandatory and suspensory merger control regime under the Anti-Monopoly Law (AML), which was adopted in 2007 and came into effect on 1 August 2008. Transactions that meet the definition of ‘concentration’ as well as prescribed turnover thresholds must be notified to the Chinese merger control authority, i.e. the Anti-Monopoly Bureau (AMB) of the Ministry of Commerce (MOFCOM). The AML also contains a broad prohibition on anti-competitive agreements and the abuse of dominant market position, as well as provisions dealing with abuse of administrative power by regulatory bodies.

The AML replaces an earlier merger review regime under the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (‘the 2006 M&A Rules’). Unlike the position under the 2006 M&A Rules, the new merger control regime applies equally to mergers and acquisitions by both foreign and domestic undertakings.

The authorities have published several implementation rules and guidelines since the AML came into force. However, there are still a number of unresolved issues as at the date of publication, including the way in which the regime applies to joint ventures. The new merger control regime in China is expected to be further supplemented over time by more detailed implementation regulations and through enforcement activity.

Overview

Merger control can take various forms. In general terms, a basic distinction is to be drawn between forms of control that are concerned essentially with the processes by which mergers and take-overs occur and those forms that are concerned with the merger itself. The first are typified by the systems existing in various jurisdictions for the regulation of financial and securities markets. Those forms of control are not covered in this publication. As their nature indicates, the predominant (if not sole) objectives of such forms of control are the protection of shareholders and the provision of an orderly framework for the conduct of transactions, usually on a stock exchange, that lead to a take-over or merger. The second forms of control, those that are discussed in this work, are designed to achieve public policy objectives concerned with the shape and structure of industry within a particular jurisdiction. They focus on the commercial and economic consequences of a merger rather than on the processes by which the merger is brought about. In general terms, such forms of control can be said to be motivated by competition policy or industrial policy considerations; and, for obvious reasons, they have tended to come into existence when the economies of the states concerned, and social and political conditions, have reached a certain point in their development at which changes in the shape and structure of industry become an issue either for purely internal reasons or else because of the place (actual or desired) occupied by the states concerned in international trade.

The global development of merger control

Merger control (in the sense relevant to this work) can be traced back at least as far as the early years of the twentieth century – but as the exception rather than the rule: it did not feature in the laws of most developed, market economies until relatively late in that century. Even in the case of economies with well-established competition law regimes, merger control (by means of provisions specifically directed to the peculiarities of mergers) was a late arrival. During the past two decades or so, however, there has been a material change in the profile of merger control law internationally as a result of the phenomenal increase in the significance and geographical scope of competition (or antitrust) law.

Turkey’s system of competition law has been updated since the mid-1990s, perhaps mainly as a consequence of the ties Turkey has been forging with the European Union (EU) and the country’s ambition to be admitted as a member state of the Union. The ongoing modernisation efforts of Turkey’s competition watchdog are also intended to address the needs of a changing economic environment, to reduce the burden on the Competition Authority which resulted from the bureaucratic notification system and to focus on more serious competition issues.

Relevant legislation and statutory standards

The principal legislation for merger control in Turkey is the Law on the Protection of Competition (Law No 4054) dated 1994 (‘the LPC 1994’ or ‘the Law’). The LPC 1994 prohibits, among other things, ‘all kinds of operations and practices which are considered to be a merger or an acquisition’ which result in the creation or strengthening of a dominant position and significantly impede competition in the relevant market.