The control of concentrations between Undertakings Law 83(Ι) of 2014 (henceforth Law 83(I)/2014), forms the rules for the control of concentrations in order to ensure that they do not result in the distortion of the effective competition in a market. A concentration is deemed to arise where a change of control on a lasting basis results (i) from the merger of two or more previously independent undertakings or parts of undertakings, or (ii) from the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings. In addition, the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity shall constitute a concentration.
Section 3 of the Law 83(I)/2014 sets the criteria and provides,
- at least two of the undertakings concerned must have a total turnover of €3.500.000 each;
- at least two of the undertakings concerned achieve turnover within the Republic of Cyprus; and
- at least €3.500.000 out of the aggregate turnover of all the undertakings concerned is achieved within the Republic; or
- it is declared as being of major importance by the Minister.
If the concerned undertakings meet the above thresholds, then they must notify their concentration to the C.P.C.
The concentration must be notified prior to its implementation and following the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest. Notification may also take place where the undertakings concerned demonstrate to the C.P.C. the existance of a good faith intention to conclude an agreement or, in the case of a public bid, where they have announced an intention or final decision to make such a bid, provided that the intended agreement or bid would result in a concentration of a major importance.
The notification shall be accepted subject to the payment of a fee of one thousand (1.000) euros.
If a specific concentration does not meet the thresholds set out in Law 83(Ι)/2014, the Minister of Energy, Commerce, Industry and Tourism is vested with the power to declare through a Reasoned Order a concentration as being of a major importance, thereby empowering the C.P.C. to investigate the merger as if the criteria of section 3 had been met (section 35 of Law 83(Ι)/2014.
Once all the necessary information is collected, in conformity with the Schedule III of the Law 83(Ι)/2014 and the notification fee is paid, the Service conducts a preliminary investigation of the notified concentration (Phase I) and submits its findings to the C.P.C., in which it records its reasoned opinion whether the concentration falls within the scope of the Law and within the meaning of concentration defined in section 6 and if it does, if it is capable of being declared compatible or not with the functioning of competition in the market.
The Service has a period of one month to communicate the C.P.C.’s decision, starting from the date all the information cited in Schedule III of Law 83(Ι)/2014 is communicated to the Service, or from the date on which the Service receives the additional information which is necessary for securing compliance of the notification with the conditions of Schedule III. In case where the required notification fee has not been paid, the time-limit starts from the date that the notification fee is paid. In case the above mentioned timetable is not kept, then the concentration will be deemed to be as compatible with the functioning of competition in the market.
The C.P.C., in its turn, taking into account the Service's report, has three options:
(i) it will declare that the notified concentration does not fall within the scope of the law or/and within the meaning of concentration, or
(ii) it will declare that, even though the concentration falls within the scope of the law and within the meaning of concentration, it does not raise serious doubts as to its compatibility with the functioning of competition in the market and thus C.P.C. will declared it compatible, or
(iii) it will find that the notified act of concentration falls within the scope of the law and the meaning of concentration and that it raises doubts as to its compatibility with the functioning of competition in the market. In such a case the C.P.C. will initiate a full investigation – Phase II Proceedings.
Where the C.P.C. decides that the concentration raises doubts as to its compatibility with the functioning of competition in the market, it instructs the Service to conduct a full investigation. In case of
full investigation the concerned parties are informed in writing. Upon receiving the decision of the Commission for a full investigation, the parties concerned must pay a fee of €6.000.
The Service may provide applicants with legitimate interest, but who are not participating in the concentration, the opportunity of a hearing to express their views in relation to the concentration. The Service must complete its investigation and file its Findings Report within 3 months of the date of notification, or the date that all the necessary information cited in Schedule III is submitted.
During the full investigation and within the time frame specified, the concerned parties may submit commitments or modifications in the concentration, with the possibility of negotiations. The Service will prepare a Report to the C.P.C., which will present its findings as to whether the doubts have been removed or can be removed with the undertaking of commitments or modifications to the concentration by the parties concerned. The Service must submit the above report before the C.P.C. within three months from the date of notification of the concentration or the date on which the Service received all the additional information necessary for achieving compliance with the requirements of Schedule III of the Law. In case the prescribed in the Law fee of
€6.000 is not paid,
the time-limit shall start from the date of payment of the fee.
With the submission of the Service’s Findings Report, the C.P.C. must, within 4 months from the date of the notification or the date that all the necessary information according to the Law were submitted, decide whether to declare the concentration compatible with the functioning of competition in the market.
In case the fee of
in the Law
is not paid,
the time-limit shall start from the date of payment of the fee.
It should be noted that, in case the above mentioned timetable is not kept, then the concentration will be deemed to be as compatible with the functioning of the competition in the market.
Τhe C.P.C. after examining the report of the Service shall decide as follows:
(a) declares the specific concentration compatible with the functioning of competition in the market subject to specific conditions,
(b) declares the specific concentration incompatible with the functioning of competition in the market.
Lastly, notifications and decisions are communicated to the Minister of Energy, Commerce, Industry and Tourism and published in the Official Gazette of the Republic.
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Commission for the protection of Competition
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