ANTIMONOPLY CONTROL OVER ECONOMIC CONCENTRATION WILL BE IMPROVING
The novelties will facilitate more detailed merger analysis
On 9 April, Deputy Head of FAS Sergey Puzyrevsky took part in the annual conference of “Kommersant” Publishing Housing on “M&A Theory and Practice”.
In his opinion, FAS devised proposals on improving the law in this field taking into account the specifics of mergers and acquisitions (acquiring not only tangible assets but also intellectual property and technologies). For instance, the 5th “antimonopoly package” has been submitted to the Government of the Russian Federation for consideration.
“We believe, first of all, that the antimonopoly law must enable control over acquiring not only tangible assets but also results of intellectual activity (intellectual property items), because companies often do not cost much but their technologies, on the contrary, are very expensive. Therefore, such criterion as “transaction value” is introduced and if the figure exceeds 7 billion RUB, the merger shall be a subject of antimonopoly control. Such intangible assets can impact the balance of market power between participants of economic relations”, pointed out Deputy Head of FAS.
According to Sergey Puzyrevsky, some cases of major cross-border mergers illustrate that such mergers cannot be considered in 30 days because it is necessary to conduct a comprehensive analysis, weigh all “pros” and “contras”, and discuss the finding with antimonopoly regulators from other jurisdiction. Therefore, the timeframe for considering such mergers should be longer. FAS suggests to allow for deadline extension for cross-border mergers affecting the Russian market by agreement with the Government of the Russian Federation.
The above-mentioned exceptions do not apply to domestic mergers, the parties to which are Russian companies.
“An important moment, which has not been spelt out in the law, is that assessing mergers and acquisitions there should be a possibility to commission expert studies necessary to evaluate their consequences for various sectors of the economy, particularly, transfer of technologies that can change the balance of forces on the markets”, added Sergey Puzyrevsky.
It is also planned to provide for “in-person” consideration of petitions by the antimonopoly authority regarding mergers that have significant effects upon competition. Petitioners and the concerned parties should be involved in such proceedings. For instance, when the antimonopoly body plans to either dismiss a petition, or believes that a warning must be issued, FAS can send its opinion to the petitioner in advance, outlining its vision of the consequences associated with a merger/acquisition in question for the market. After issuing an opinion, petitioners can give their proposals on a package of measures that they find possible from their side in order to observe competition on the market. In this case the petition is considered in person.