Frequently asked questions related to the application of the Act No. 143/2001 Col.
Question:
In the sense of the Act, are the persons listed in the Article 15 (2) of the Act obliged to submit proposal for clearance of a merger in every of the cases outlined by the Article 12 while the issue of fulfilling conditions quoted by the Article 13 will be assessed subsequently by the Office or are the persons obliged to submit proposal only in the case of observance with the conditions?
Answer:
According to the Act, the obligation of notification relates to such kinds of dealing, which constitute, in the sense of the Article 12, the merger provided that the conditions given by the Article 13 are fulfilled. The Article 12 thus determines when in the sense of the Act it is the case of a concentration while the Article 13 determines which of these concentrations are subjected to the notification to the Office and demand in this way a submission of the proposal for their clearance in the sense of the Article 15 of the Act.
Question:
Is a merger of two companies operating on two quite different markets the concentration in the sense of the Article 12 of the Act?
Answer:
For assessment if a merger of two companies is the concentration in the sense of the Act it is not decisive whether merging competitors are operating on the same relevant market. In case that such concentration, on account of the provision of the Article 13 of the Act, would be subjected to the Office´s authorization, the fact which markets the merging competitors are operating on is the subject of analysis within the merger clearance proceedings.
Question:
Does the condition of notification relate to the concentrations of competitors realised abroad the participants of which influence the economic competition in the Czech Republic in minimum extend?
Answer:
Provided that the concentration is realised abroad and joint share of all participants of the concentration (in the sense of provision of the Article 14 (2) of the Act) is not bigger than 10% on the Czech Republic relevant market, there is not fulfilled, if there are no other facts that would challenge this conclusion, the condition for application of the Act according to provision of the Article 1 (3) of the Act and the concentration does not need to be notified according to the Article 12 and following of the Act. Among the mentioned facts, which would rebut this conclusion, it belongs, for example, direct participation of at least two of the merging competitors on the Czech Republic market through their Czech subsidiaries.
Question:
In the case of a concentration of companies operating on the same market, does total net turnover in the sense of the Article 13 of the Act take into account only the turnover achieved by all the merging competitors on the market or also the turnover achieved on other markets (thus on the markets where only some of the merging competitors operate)?
Answer:
The total net turnover of all the merging competitors in the sense of the Article 13 of the Act is not possible to refer only to the relevant market on which all the merging competitors operate. The total net turnover has to include all turnovers achieved by all the merging competitors on all the markets, thus also the ones where only some of them are operating.
Question:
Does it follows from the fact that among subjects which execute control over the merging competitors in the sense of the Article 14 (2) of the Act there is also the state through the Fund of National Property the obligation to include into a total net turnover also turnovers of all other companies controlled in this way by the state?
Answer:
Provided that with regard to a concrete case (for example due to the identical character or possible „common interest“ of the other companies) there is no need for different procedure, then it is not necessary, while assessing the concentration, to take into regard turnovers of companies which are controlled by the state in the same way as the merging competitors. Similarly, there is no need to list these companies in a proposal for a clearance of a merger. Provided that the competitor controlled by the state is not part of a holding company and if there does not exist any other co-ordination in relation to other competitors controlled by the state when the competitor can be considered to be a separate, independent economic unit, the turnover of other competitors in the position of state companies is not added to its turnover. However, in the cases when the state control over several competitors is concentrated by means of one holding company or the competitors are jointly managed or there is other reason from which clearly follows that the competitors create a part of one economic unit, then it is necessary to include the turnovers of all the competitors falling under this economic unit into the total net turnover.
Question:
How shall the concept „undertaking“ be explicated in the sense of the provision of Article 12 of the Act? Is it understood as an aggregate object (věc hromadná?), thus the object of legal relations or the subject of them, for example commercial company?
Answer:
Undertaking is understood by the Act as the aggregate object, thus as the object of legal relations. For subjects of legal relations, thus persons operating in relations of economic competition, the Act uses the concept of „competitor“.
Question:
Shall the case of a merger of two subsidiaries of an owner or the case of a merger of a parent company and its subsidiary be considered to be a concentration of competitors in the sense of the Article 12 (1) of the Act?
Answer:
In the sense of the Article 12(1) of the Act, the concentration is realised through transformation of two or more earlier on a market independently operating subjects. The independency must be understood not only in the legal sense but also in the economic sense. The merging competitors thus must be economically independent on each other before concentration and they must lose their independency through the concentration. A merger of two subsidiaries of one owner (possibly a merger of a parent company and its subsidiary), thus the merger in frame of one economic structure, cannot be considered to be the concentration in the sense of the Act.
Question:
Shall the case of acquiring a part of an undertaking of other competitor by the way that is different from an agreement on a transfer of the part of undertaking according to the Article 487 of the Business Code be considered to be the concentration in the sense of the Article 12 (2) of the Act?
Answer:
On the basis of the Article 487 of the Business Code (BC), the provision of the Article 476 and the following (the agreement on sale of undertaking) relate also to the agreement on sale of a part of undertaking. It follows from this provision that in this case must be at stake the part of undertaking that constitutes independent organizational unit. In the same way as it is in the case of agreement on transfer of undertaking, it must be transferred on a purchaser all the rights and obligations connecting with this organizational unit. If these conditions are not fulfilled, then it is not the case of the agreement on the sale of a part of undertaking and the application of the Article 12 (2) of the Act is excluded. However, it may be the case of the concentration in the sense of the Article 12 (3) of the Act, if it is possible to add unequivocally to the relevant part of the undertaking or to the transferred assets, which are not in the case the part of the undertaking, the turnover achieved by the sale of goods on the relevant market.
Question:
In what way shall the concept „it acquires possibility of control over other undertaking“ given in the provision of the Article 12 (3) of he Act be in practice explained? Is it possible to determine concrete limit when we can think about „control“ (for example 51% share“)?
Answer:
The control is understood by the Act as the possibility to decide about or to influence competitive behaviour of other competitor. Acquiring control in such a way can not be in general connected with a certain fixed limit because in concrete cases holding of absolute share or ownership of majority stake does not need to be a case. Under certain conditions the control can be acquired also through smaller share than absolute one, for example in the situation when remaining shares or stake will be dispersed among a large number of small owners. The issue of „acquiring control“ in the sense of the Act must be thus considered on the ground of concrete circumstances of a given case.
Question:
Can a case of share transfer in certain undertaking (the share enabling its owner to exercise control over the undertaking) from a parent company to its subsidiary be considered to be a concentration in the sense of the Article 12 (3) of the Act?
Answer:
This type of transaction cannot be considered to be a concentration in the sense of the Article 12(3) of the Act because there is not possible to deduce establishment of control in the sense of this provision. The parent company controls even after the transfer the other company in the same way as it was before the transfer, only with the difference that the control is not exercised directly but through its subsidiary.