According to the Cyprus Merger Control legal framework set out by the Control of Concentrations between Undertakings Law of 2014 (Law 83(I)/2014) (“Law”), transactions that cumulatively satisfy the jurisdictional thresholds are considered to be “concentrations of major importance”.
Concentrations of major importance must thus be notified to the Cyprus Commission for the Protection of Competition (“CPC”) in order to be subjected to Merger Control, and may only be implemented upon receiving clearance by the CPC.
Substantive test
The substantive test applied by the CPC for the assessment of a notified concentration is whether the concentration significantly impedes competition in Cyprus or a substantial part of it, in particular as a result of creating or strengthening a dominant position. For this purpose, the CPC takes into account the need for the maintenance and development of effective competition in the relevant markets based on, among other things, the structure of the affected markets and of other markets which are affected by the concentration.
Affected markets
Affected markets are defined within Schedule I of the Law as all relevant product and geographic markets, and plausible other relevant product and geographic markets in Cyprus, in which:
- Two or more undertakings having a horizontal relationship and participating in the concentration are active, and will as a result of the concentration collectively possess a market share of at least 15%, or
- Any of the undertakings participating in the concentration having a vertical relationship are active, provided that either of the individual or collective market share, at any level, amounts to at least 25%, regardless of whether a supplier-customer relationship exists between the participating undertakings.
Assessment of competitive effects
In assessing the competitive effects of a concentration, the CPC considers the following factors:
- The participating undertakings’ position in the market, as well as the positions of their connected undertakings;
- The financial strength of the said undertakings;
- The alternative sources of supply of the products and services that are the commercial objects in the affected markets and/or in the other markets that the concentration may have significant effects on, and their substitutes;
- The supply and demand trends for all products and services;
- Any barriers to entry to the affected markets and/or other markets on which the concentration may have significant effects;
- The interests of the intermediate and final consumers of the relevant products and services; and
- The contribution to technical and economic progress and the possibility of it being in the interest of consumers, provided it does not obstruct competition.
The Law does not stipulate a reduced / simplified notification procedure for concentrations which meet the jurisdictional thresholds but do not give rise to any affected markets.
This article has been published on Lexology and is available here.
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