 Past experience  SIEC test  Cases  Mergers in Times of Crisis  Conclusions

 Act No 63/1991 Coll. on the Protection of Competition › „public interest“ test › § 8a (2)  Act No 143/2001 Coll. on the Protection of Competition › dominance test › § 16 (2)

 Introduced by the 4 th amendment of the Act No 143/2001 Coll. on the Protection of Competition in 2005 › § 17 (3) „The Office shall not approve a concentration provided it would result in a substantial distortion of competition in the relevant market particularly because it would result in or would strengthen a dominant position of the undertakings concerned…” › Same as EC Merger Reg.

 Decision of the Office of , No. R 18/2001  Merger between main suppliers of natural and mineral water  Relevant market defined narrowly as i) market for packaged natural and mineral water and ii) market for packaged flavored natural and mineral water  Prohibition decision, behavioral remedies found insufficient

 Decision of the Office of , No. S 64/05  First decision of approval of a previously prohibited merger › Does not constitute rei iudicatae  Relevant market defined more broadly as: i) market for packaged natural and mineral water and ii) market for packaged flavored soft drinks based on drinking water  Re-assessment of market conditions and analysis of their changes that led to the original prohibition decision › Decreasing market shares of merging parties › Change in market concentration and increasing volume of the market › Increased imports › New competing products, private labels › Lower barriers to entry (lower prices of production technology) › Increasing position of the discount chains › Decrease of loyalty to established brand

 Decision of the Office of , No. S 293/2008  Merger between two main groups of undertakings in the area of agricultural sector  April the Office has cleared the transaction subject to conditions after an in-debt five months investigation  Horizontal merger, many overlaps, competition concerns identified  Structural remedies – divestitures  The difference of the approach between the dominance test and the SIEC test › The Office required commitments concerning also the relevant markets, where the merged entity had no dominant position › Main concern: merger would eliminate an important competitive force in case where the economic and financial power of the other competitors was not comparable to those of the merging parties

 Authorities made clear that the standard would not be relaxed in light of the crisis  Number of notified transactions decreased › 2009: 38 › 2008: 56 › 2007: 61  Spring ´09 - Office adopted "crisis soft law package“ › 1. Notice on the prohibition of implementation of concentrations prior to the approval and exemptions thereof; and › 2. Notice on the application of the failing firm defence concept in the assessment of concentrations of undertakings  However, has not been invoked or used by the Office

 SIEC is not a substantive change from the dominance test as the dominance criterion still remains one of the main criteria  However - SIEC provides more scope for application of economic assessment in merger control  Limited impact as to the “enforcement gap”– the Office has not so far dealt with this issue in its decisional practice  Crisis has affected the number of notified transactions  Increasing role of economics › Parties to provide sufficient evidence that the efficiencies generated by the merger  benefit consumers  are merger-specific and  are verifiable › Office to focus on detailed market investigations

For further information: Barbora Bednářová Becker & Poliakoff, s.r.o. U Prašné brány 1078/ Praha 1 Tel.: (+420)