Self-assessment results of ICN Survey- Randoph Tritell - US FTC - June 2016 OECD discussion
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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
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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
- 4. ICN Recommended Practices 2011 Review • 27: Conform • 57: Do Not Conform 27/8427/84 agenciesagencies
- 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
- NEXT STEPS - 80 total responses; 73 replied yes -
- NEXT STEPS - 80 total responses; 73 replied yes -
- NEXT STEPS - 80 total responses; 73 replied yes -