The Slovak Parliament is currently deciding on substantial amendments to the Slovak Competition Act (the “Amendments”), prepared by the Slovak Competition Authority (the “AMO”). If approved in time, the Amendments will be effective as of July 1, 2014. Below, we provide an overview of the most significant changes.
The most significant of the Amendments are aimed at providing higher efficiency and speed for merger filing procedures. Following on the 2-phase procedure implemented in 2012, the new Amendments introduce a simplified form of merger notification in cases involving: (i) the acquisition of sole control instead of joint control by the acquirer; (ii) no horizontal/vertical overlap in the activities of the parties to the concentration; or (iii) overlap in activities not exceeding 15% (horizontal overlap) or 30% (vertical overlap) of the respective market. This approach has been long desired by practitioners. Parties would retain the existing right to apply for permission to submit a reduced amount of the otherwise statutorily-required documentation in support of the notification where, for example, a full and formal submission is unnecessary and compliance would be onerous or impossible.
In addition, while the current waiting period for an AMO decision does not begin until the AMO confirms that it has received complete notification, under the Amendments the waiting period for the AMO’s decision would start running from the first submission of merger notification – thus making the duration of merger control proceedings more predictable. However, when the AMO believes that a filing is incomplete, a request that the parties complete the notification would stop the clock until all required documents/information have been submitted.
The deadline for an AMO decision regarding exemptions from the requirement that parties delay implementation of a merger pending AMO clearance would be shortened to 20 business days. As before, exemptions from this obligation could be granted only in exceptional cases and for particularly urgent actions (e.g. the conclusion of a seasonal agreement).
As regards cartels, the Amendments are aimed at bringing the Slovak Competition Act closer to EU Competition law. The leniency and settlement provisions (introduced in law for the first time although already applied in practice) would be regulated by secondary legislation enabling the AMO to react more flexibly to new developments in the law (such as new decisions by courts) in the future. As an alternative, it would be possible to end infringement proceedings through commitments offered by undertakings, too. In addition to testing such commitments, the AMO could ask for the appointment of an independent trustee to the costs of undertakings, who would be in charge of supervising the fulfillment of these commitments.
In this respect, a new weapon for combating cartels – already existing in Hungary and the UK – will be created. An individual who first discloses the existence of a cartel to the AMO would be entitled to a monetary reward in the amount of up to 1% of the aggregate amount of the fines imposed by the AMO on the cartel members. The maximum amount of the reward would be EUR 100,000. The “whistleblower” could, if he or she wishes, remain anonymous. The whistleblower can be neither an entrepreneur nor an employee of the leniency applicant. It cannot be avoided that this opportunity might be abused by former “hostile” employees wishing revenge upon their employer.
The Amendments also propose more severe sanctions for administrative offenses committed in the course of dawn raids carried out by the AMO. A fine of up to 5% of an undertaking’s worldwide turnover could be imposed where it fails to grant AMO officials access to its premises or in cases where the undertaking damages a seal of the AMO. For similar reasons, an individual could be fined up to EUR 80,000 as a result of dawn raids in private premises.
The powers of the AMO are also redefined. The Amendments distinguish between a general investigation by the AMO in a particular area of business aimed at “market” research into a competition situation and an investigation to discover if there are reasons for the commencement of an administrative proceeding. The new dawn raid regulation specifies the essential criteria for obtaining authorization to carry out the inspection, whereby an inspection in other or private premises must be accompanied by a court order (separate authorization by the AMO shall be no longer necessary).
Finally, the AMO has searched for a balance between the protection of proprietary/confidential information and ensuring the defense rights of the parties. Such protected information could be provided, under exceptional circumstances, to another party (with the consent of the affected party) or to its representative (in the absence of this consent), only for review – i.e. without the possibility to make copies or excerpts and under a confidentiality agreement. Moreover, as regards private enforcement of competition law, the undertakings which successfully apply for immunity would be protected from cartel damage claims provided that the claimant is able to obtain compensation for the damages suffered from the other cartel participants.
Even if the Amendments have not been passed in the final form in Parliament yet, the political will to approve them as currently constructed appears to exist.
By Lubos Frolkovic, Partner, and Zuzana Slavikova, Senior Associate, Wolf Theiss
This Article was originally published in Issue 2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
