This presentation by Randoph Tritell - US FTC was made during a roundtable discussion on Jurisdictional nexus in merger control regimes held at the 123rd meeting of the Working Party No. 3 on Co-operation and Enforcement on 15 June 2014. More papers, presentations and contributions from delegations on the topic can be found out at www.oecd.org/daf/competition/jurisdictional-nexus-in-merger-control-regimes.htm
Self-assessment results of ICN Survey- Randoph Tritell - US FTC - June 2016 OECD discussion
1. Self-Assessment Results
ICN Survey 2016
Randolph W. Tritell
U.S. Federal Trade Commission
Presentation for OECD Competition Committee,
Working Party 3
June 15, 2016
www.internationalcompetitionnetwork.org
2. ICN Guiding Principles
1. Sovereignty
2. Transparency
3. Non-discrimination
on the basis of
nationality
4. Procedural fairness
5. Efficient, timely, and
effective review
6. Coordination
7. Convergence
8. Protection of
confidential
information
3. ICN Recommended Practices
1. Nexus between the merger’s
effects and the reviewing
jurisdiction
2. Clear and objective
notification thresholds
3. Timing of merger notification
4. Merger review periods
5. Initial notification
requirements
6. Conduct of merger
investigations
7. Procedural fairness
8. Transparency
9. Confidentiality
10. Interagency coordination
11. Review of merger control
provisions
12. Remedies
13. Competition agency powers
5. ICN Recommended Practices
2011 Review
• Some jurisdictions fall into
multiple categories.
• Some jurisdictions implemented
changes but did not achieve full
conformity.
6. ICN Self-Assessment Survey
2016
• Goal: assess implementation of almost all of the ICN
Recommended Practices and identify areas for future work
• As of June 6, 2016, 80 of the 100 jurisdictions surveyed
completed the assessment.
– Not every question has been answered by every survey
recipient.
– Five additional respondents partially completed the
survey.
7. ICN Self-Assessment Survey
2016
• Do you require a substantial local nexus?
• 81 out of 85 Agencies Responded
• Yes: 74
• No: 7
74/8174/81
agenciesagencies
8. Notification obligation:
buyer only
• Can the local activities of the acquirer alone trigger notification?
• 79 out of 85 Agencies Responded
• Yes: 30
• No: 49
30/8030/80
agenciesagencies
9. Calculating thresholds: Target
• When calculating the sales or assets of the business being acquired, does
your jurisdiction count only the sales and/or assets of what is being
acquired (i.e., not sales and/or assets of the entire selling entity or
group)?
• 80 out of 85 Agencies Responded
• Yes: 57
• No: 23
57/8057/80
agenciesagencies
10. Notification Criteria
• Do the merger notification thresholds use objectively quantifiable
criteria (e.g. sales and/or assets) and not other criteria, such as
market share, market power, or other potential transaction-related
effects?
• 81 out of 85 Agencies Responded
• Yes: 57
• No: 24
57/8157/81
agenciesagencies
11. ICN Members with Merger
Control: Two party / target
Blue map: ICN members with merger control. Red map: ICN members with two party / target thresholds
12. ICN Self-Assessment Survey
2016: Conforming Changes
• In the last five years, 10 jurisdictions self-reported reforms to bring
their notification thresholds into conformity:
1. Argentina
2. COMESA
3. Greece
4. India
5. Italy
6. Kenya
7. Kosovo
8. Pakistan
9. Panama
10.Turkey
13. Two Party / Target
Objective Thresholds
Number of
Jurisdictions
Number of
Jurisdictions
with Two Party /
Target
Thresholds
Number of
Jurisdictions
without Two
Party / Target
Thresholds
OECD Members &
Observers
46 25 21
Non-OECD
Jurisdictions
39 9 30
Total 85 34 51
(60%)(40%)
14. ICN Self-Assessment Survey
2016
Two party / target thresholds
OECD Members & Observers
Other threshold
OECD Members & Observers
Belgium Ireland
Bulgaria Italy
Canada Japan
Czech Republic Korea
Denmark Lithuania
Estonia Norway
European Union Romania
Finland South Africa
France Sweden
Germany Switzerland
Greece Turkey
Hungary United States
Iceland
Australia Peru
Austria Poland
Brazil Portugal
Colombia Russia
India Slovak Republic
Indonesia Slovenia
Latvia Spain
Malta Taiwan
Mexico United Kingdom
Netherlands Ukraine
New Zealand
15. ICN Self-Assessment Survey
2016
Two party / target thresholds
Non-OECD Members & Observers
Other threshold
Non-OECD Members & Observers
Argentina Kenya
COMESA Kosovo
Croatia Pakistan
Faroe Islands Panama
Guernsey
Albania Honduras Nicaragua
Armenia Israel Senegal
Barbados Jamaica Serbia
Botswana Jordan Singapore
Ecuador Macedonia Seychelles
EFTA Malawi Tanzania
El Salvador Mauritius Tunisia
Gambia Moldova Vietnam
Georgia Montenegro Zambia
Greenland Namibia Zimbabwe
16. ICN Self-Assessment
Survey 2016
• Nine non-OECD members and observers self-reported two party /
target thresholds.
1. Argentina
2. COMESA
3. Croatia
4. Faroe Islands
5. Guernsey
6. Kenya
7. Kosovo
8. Pakistan
9. Panama
17. ICN Self-Assessment Survey
2016: Role of RPs in Reform
• Have you used the ICN’s Recommended Practices in reviewing your
merger notification and review regime?
• 80 out of 85 Agencies Responded
• Yes: 52
• No: 28
52/8052/80
agenciesagencies
18. Future ICN Role
• Should the ICN take a more active role in promoting the
ICN Recommended Practices?
– Ninety-one percent of respondents, 73 agencies, said yes.
73/8073/80
agenciesagencies
19. ICN Support for Domestic Reforms
• How should the ICN take a more active role?
– Assist members that welcome external support for domestic
reforms (e.g. amendments to laws or new regulations)
– 46 agencies (58%) replied yes
46 agencies46 agencies
20. Merger Working Group:
Technical Assistance
• How should the ICN take a more active role?
– In-depth technical assistance from the Merger Working Group
– 42 agencies (53%) replied yes
42 agencies42 agencies
21. ICN Monitoring and
Recommendation
• How should the ICN take a more active role?
– ICN member reports on member compliance and jurisdiction-
specific recommendations for potential improvements
– 34 agencies (43%) replied yes
34 agencies34 agencies
22. Self-Assessment Results
ICN Survey 2016
www.internationalcompetitionnetwork.org
Randolph W. Tritell
U.S. Federal Trade Commission
Presentation for OECD Competition Committee,
Working Party 3
June 15, 2016
Editor's Notes
The Recommended Practices for Merger Notification and Review Procedures address [#1 -13]
The first systematic review of implementation of the N&P Recommended Practices was in 2010.
A small project group undertook a survey of ICN members’ conformity with the first four Recommended Practices, covering local nexus and notification thresholds, timing of notification, and review periods.
At the same time, there was a stocktaking of changes to date.
30 members conformed according to the survey, but three of these counted the entire B side in calcuating thresholds – we didn’t look at that at the time.
Between 2001 and 2011, thirteen members eliminated subjective thresholds based on market share or triggered by standards such as “creating a dominant position.”
[Belgium, Bulgaria, Czech Republic, Estonia, France, Iceland, India, Norway, Pakistan, Poland, Romania, Slovak Republic, Turkey eliminated subjective thresholds.]
Between 2001 and 2011, 22 ICN members introduced significant changes to their merger thresholds to bring them into conformity with the Recommended Practices by adding a two party or target objective threshold.
Sixteen jurisdictions eliminated thresholds that triggered notification solely on the basis of worldwide sales or assets.
[Argentina, Bosnia, Brazil, Colombia, Croatia, Czech Republic, El Salvador, Estonia, Iceland, India, Ireland, Korea, Latvia, Poland, Serbia, Slovak Republic. ]
Sixteen jurisdictions (including seven that eliminated the worldwide requirement) strengthened thresholds by requiring at least two parties (or the target) to have sales or assets in the reviewing jurisdiction.
[Albania, Belgium, Bulgaria, Czech Republic, Estonia, Finland, Germany, Hungary, India, Ireland, Korea, Latvia, Portugal, Romania, Slovak Republic, Slovenia. ]
Not sure whether we want to include, but 30 jurisdictions total made changes – but not all brought them into conformity. For example, Bosnia replaced its worldwide threshold with a two party local nexus requirement, but also added a market share threshold. Moldova made revisions but maintained a market share threshold. In the initial round of reforms, Brazil eliminated the worldwide sales threshold, and in 2012 eliminated the market share threshold in favor of a two party test, however, in calculating thresholds the sales or assets of the entire selling party is included.
-81 total responses, out of 88 attempted surveys
-74 said YES local nexus is required
-7 said NO local nexus is not required
Follow up question 2 re local activities of buyer alone trigger notification obligations
Follow up question 1 re threshold obligations of only the target
Follow up question 3 re objective criteria
Based on these responses 34 jurisdictions fully comply with ICN RP I and II
Survey also suggested significant changes took place between 2011-2016
Of the 34 conforming jurisdictions, 4 were not previously surveyed: COMESA, Faroe Islands, Guernsey, and Kosovo
Others introduced reforms to bring their thresholds into conformity (self-ID’ed and ICN reviewed: COMESA, Greece, India, Italy, Kosovo, Panama, Turkey)
Note that the map does not individually recognize COMESA countries; there is a representative shading in Malawi (where CA is HQ’d)
Non-oecd countries:
-of 85 respondents, 32 are OECD members; an additional 14 countries are OECD Observers; remaining 39 are non-OECD members/observers
-of the 34 that fully comply: 21 are OECD Members, 4 are OECD observers, and remaining 9 are non-OECD members/observers
OECD Members (32)
OECD Observers (14)
Non-OECD Members
Non-oecd countries:
-of 85 respondents, 32 are OECD members; an additional 14 countries are OECD Observers; remaining 39 are non-OECD members/observers
-of the 34 that fully comply: 21 are OECD Members, 4 are OECD observers, and remaining 9 are non-OECD members/observers
OECD Members (32)
OECD Observers (14)
Non-OECD Members
Non-oecd countries:
-of 85 respondents, 32 are OECD members; an additional 14 countries are OECD Observers; remaining 39 are non-OECD members/observers
-of the 34 that fully comply: 21 are OECD Members, 4 are OECD observers, and remaining 9 are non-OECD members/observers
OECD Members (32)
OECD Observers (14)
Non-OECD Members
Non-oecd countries:
-of 85 respondents, 32 are OECD members; an additional 14 countries are OECD Observers; remaining 39 are non-OECD members/observers
-of the 34 that fully comply: 21 are OECD Members, 4 are OECD observers, and remaining 9 are non-OECD members/observers
Note that the map does not individually recognize COMESA countries; there is a representative shading in Malawi (where CA is HQ’d)
Use of ICN RPs
-80 total responses
-52 said YES
-28 said NO