· Obligation to inform existing minority shareholdings and the acquisition of minority shareholdings.
· Penalization of Interlocking- simultaneous participation of a person as relevant executive in two or more competing undertakings.
· Upcoming publication of the regulations detailing the information requirements for the notification of concentrations.
Obligation to inform minority shareholdings
Among the recent amendments to the Chilean Competition Law (see our prior newsletters NEW ANTITRUST STATUTE REVOLUTIONIZES THE SYSTEM IN CHILE and CHILE COMPETITION AUTHORITY DETERMINES THRESHOLDS FOR PRE-MERGER NOTIFICATION) is the obligation to inform the Antitrust Prosecutor (FNE) about the acquisition, by one undertaking or an undertaking of the group to which it belongs, of an equity interest of more than 10% in a competing undertaking. The aim of this provision is to allow the FNE to assess whether these acquisitions –which are not covered by the Merger Control Regime- could, nevertheless, have anticompetitive effects. Such obligation exists only when the acquirer or its group, as appropriate, and the undertaking whose shares are being acquired, each had, separately, an annual turnover of more than UF 100,000 (approx. US$ 3.8 million) during the last calendar year. The acquisition of minority shareholdings has to be informed to the FNE within 60 days from its completion. However, minority shareholdings existing at the moment of the entry into force of the new law, must be reported within 180 days from the publication of the law in the Official Gazette. Thus, the deadline to perform this notification expires on the 26th February, 2017.
Prohibition of interlocking between competing undertakings
The law categorizes interlocking as an anticompetitive conduct, specifically penalizing the participation of a person as relevant executive or director in two or more competing undertakings, simultaneously, provided that the group of undertakings to which each of the concerned undertakings belong had an annual turnover of more than UF 100,000 (approx. US$ 3.8 million) during the last calendar year. This infringement will only occur if the positions referred to above are still held, simultaneously, by a person in two or more competing undertakings, after 90 days have passed from the end of the calendar year in which the turnover threshold was surpassed. This provision will enter into force 180 days after the publication of the law in the Official Gazette, that is, on the 26th February, 2017.
These provisions are similar to those of countries like Austria, Germany and the United Kingdom, whose competition authorities have the ability to review acquisitions of minority shareholdings. In many jurisdictions outside the EU, such as Canada, the United States and Japan, merger control rules also allow for the review of similar structural links. The provisions are also in line with the undergoing Review of the EU Merger Control system, during which it has been recognized that minority shareholdings and interlocking directorates may, in some circumstances, produce adverse effects on competition.
In the context of the New Merger Control Regime -that establishes a mandatory pre-merger notification system for concentrations that cross the thresholds established by the FNE- on the 1st March, 2017, the Government will publish the Regulations detailing the information requirements for the notification of concentrations to the FNE. These Regulations also consider a simplified notification mechanism for concentrations that are unlikely to raise competition concerns. The Regulations, that were subject to a public consultation last year, require the presentation of a large quantity of information and supporting documentation related to the projected operation, its structure, rationale, relevant markets affected and entry barriers, among others. These information requirements are standard in jurisdictions where a mandatory pre-merger notification system for concentrations is in place.