Bulgarian watchdog introduces pre-notification contacts in merger proceedings
As of 1 January 2021, Bulgaria's Commission for the Protection of Competition (the "CPC") will be available for pre-notification discussions. To this end, it has also published bylaws ("Rules") for such contacts (adopted by CPC decision 1005/10 December 2020).
Pre-notification contacts preferably should be initiated at least two weeks before the expected date of notification. The CPC recommends that during the pre-notification contacts the parties provide background information about the transaction, a brief description of the relevant sectors and markets involved, and the likely impact of the transaction on competition in general. The Rules also allow parties to submit a draft notification as a basis for further discussions with the CPC.
On the side of the CPC, the case handlers reviewing the transaction would be present, which seems like an important improvement. At present, discussions with the case handlers are informal and possible only during the formal review process. Also, as a standard policy of the CPC, case handlers currently are reluctant to provide information on the progress of the filing and potential concerns. The parties currently only learn about the CPC's standpoint through requests for information, which delay the merger control review by at least five to ten business days.
The Rules will provide the notifying parties with the opportunity to discuss proposed remedies still in the notification phase. So far, remedies could only be proposed during an in-depth investigation in Phase II of the merger control proceedings.
Next, the Rules allow the notifying parties to discuss waiving some of the CPC's mandatory questions that must be answered with the merger filing. This may result in significant bureaucratic relief for transactions involving notifying parties with larger market shares acquiring targets with insignificant market shares. Currently, for all transactions that involve 15 % combined market shares (horizontal overlaps) or 25 % (vertical overlaps) the parties must submit the standard (long-form) merger filing, which is rather burdensome. Such detailed filing seems unnecessary for transactions involving small targets (having less than a 5 % market share), especially when acquirer reaches the 15/25 % market share by itself and the transaction does not have the potential to affect product markets in Bulgaria.
The pre-notification contacts will be held in the office of the CPC, but the Rules also allow for online meetings (in case of urgency or in the current times of social distancing).
In conclusion, we believe that the CPC's Rules on pre-notification contacts are a step in the right direction in implementing best European practices on merger control. Nevertheless, we have yet to see how practical they would be for the notifying parties and whether they would lead to a shorter review period once the official proceeding is opened and smoother and more effective communication with the case handlers, and whether they could facilitate filings which formally meet the criteria for the standard (long-form filing) despite having an insignificant market effect.