According to the Control of Concentrations between Undertakings Law of 2014 (Law 83(I)/2014) (“Law”), transactions that cumulatively fulfil the jurisdictional thresholds set out for the application of the Cyprus merger control framework constitute “concentrations of major importance” and must therefore be notified to the Cyprus Commission for the Protection of Competition (“CPC”).
However, the Law stipulates that a transaction may also become subject to merger control through its declaration as a “concentration of major importance” by the Minister of Energy, Commerce and Industry (“Minister”).
This article aims to present the circumstances under which a transaction may be declared as a concentration of major importance by the Minister and thus become subject to merger control, and the procedure that follows.
Powers of the Minister of Energy, Commerce and Industry
According to Section 5 of the Law, the Minister may, notwithstanding the non-fulfilment of the jurisdictional thresholds, declare by Order a concentration as one of major importance and thus render it subject to merger control. The Order must be reasoned and relate to reasons of public interest concerning the effects it may have on public security, the pluralism of the media, and the principles of sound administration.
Additionally, Section 35 of the Law stipulates that the Minister may also declare by a reasoned Order a concentration that has been notified to the CPC as one of major public interest. This may happen prior to the issuance of a decision by the CPC at the completion of the preliminary investigation (Phase I) stage, whereby the concentration would be cleared or referred for a full investigation (substantive test) (Phase II).
Where an Order is issued by the Minister on the basis of Sections 5 or 35 of the Law, the CPC’s decision with regard to the concentration’s compatibility with the functioning of competition in the market is submitted to the former. The decision is also published in the Official Gazette of the Republic of Cyprus and notified to the notifying party.
In the case where the CPC deems the concentration referred by the Minister as compatible with the functioning of competition in the market, the latter must weigh the public interest reasons contained in Section 35 against the need for the protection of competition in the market, and within 15 days from the date of receiving the CPC’s decision:
- Provide a written statement expressing assent, which is afterwards notified to the notifying party by the CPC within 7 days from the date the latter receives notice of the said statement; or
- Due to disagreement with the decision, refer it to the Council of Ministers of the Republic of Cyprus (“Council of Ministers”) to be reviewed in the light of the reasons provided in Section 35 of the Law.
In the case of disagreement and subsequent referral to the Council of Ministers, the latter must, without delay, weigh the public interest reasons as provided in Section 35 of the Law against the need for the protection of competition in the market. Upon completion of the said balancing, the Council of Ministers decides on whether to provide clearance to the concentration and afterwards issues a reasoned Order.
The said Order of the Council of Ministers is published in the Official Gazette of the Republic of Cyprus and the notifying party must be informed of it by the CPC within 7 days from the date the CPC receives notice of the Council of Ministers’ Order.
Both the written statement issued by the Minister mentioned above and the Order issued by the Council of Ministers may be contested before the Administrative Court of the Republic of Cyprus through an administrative recourse on the basis of Article 146 of the Constitution of the Republic of Cyprus.
A concentration that has been cleared by the CPC following the issuance of an Order by the Minister declaring it as one of major importance or public interest may not be implemented unless the notifying party receives:
- Notice of the Minister’s assenting written statement with regard to the CPC’s decision; or
- Notice of the reasoned Order of the Council of Ministers approving the concentration.
More information concerning the Cyprus Merger Control procedure is available here.
More information concerning the services we offer in relation to Merger Control is available here.