Tuesday, August 19, 2008
Posted by D. Daniel Sokol
Francisco Marcos and Albert Sánchez demystify Lights and Shadows in the Modernization of Spanish Merger Review.
ABSTRACT: Almost a year ago, and after substantial debate and a long legislative process, the reform of Spanish competition regulation was completed. The new Competition Act, which came into force on September 1, 2007, supersedes the previous Act of 1989 and significantly transforms the Spanish system for the defence of competition. As this article shows the new Competition Act has aligned the Spanish and the European merger review procedures almost completely. Substantial reform in the institutional and procedural framework will enhance the review process, which is now more flexible (simplified procedures, market testing) and grants the parties significant leeway for a proactive intervention in the process (pre-notification contacts, remedies negotiation). However, the reform has not overcome all the perceived shortages of the system. Keeping the market share threshold may result in an over-reaching MR system in some cases, as well as unnecessary burdens and costs to companies, particularly in foreign-to-foreign transactions. Allowing for political review for reasons unrelated to competition generates uncertainty and leaves the door open to substantial interference in certain high-profile cases (particularly where national champions might be involved). Nonetheless, the modernization and fine-tuning of the Spanish MR system is to be welcomed, even if there still may be room for further improvement.