MERGERS: AMO SR imposed a fine of more than 20 million euros for the breach of obligation to notify a merger and for the breach of prohibition to exercise rights and obligations arising from the merger

On 29 June 2023 the Antimonopoly Office of the Slovak Republic, the Division of Concentrations, (hereafter "the Office") issued a decision, deciding that an undertaking had violated the Article 10 Paragraph 9 of the Act No. 136/2001 Coll. on Protection of Competition and also the Article 10 Paragraph 1 of the Act No. 187/2021 Coll. on Protection of Competition.

The Office´s findings had revealed that the undertaking, operating in the bakery segment, had failed to notify the Office of a merger, by which it had acquired control over two competing bakeries and also it had exercised rights and obligations arising from the merger without obtaining the Office´s approval for such an acquisition.

This had resulted in the violation of the Act on Protection of Competition, according to which undertakings are obliged to notify the Office of mergers that meet the criteria for the size of entities affected (expressed by their turnover) set by the Act. The purpose of such a setting is to include under the Office´s control the mergers, which, due to the economic power of merging parties, might affect competition in the territory of the Slovak Republic.

Undertakings are also obliged to refrain from any exercise of rights and obligations arising from the merger until the Office decides on it. The merger control system is thus based on the principle of preventive ex ante control, the aim of which is to prevent the disruption of effective competition, and thus a merger can only be implemented after being assessed by a competition authority to be non-problematic.

The need to allow the Office to assess a merger is particularly important in case of a merger between direct competitors, which is considered to be the most closely monitored in the context of merger control in general. As a result of the horizontal linking between competitors' activities without the Office´s assessment of consequences for competition and deciding whether such a merger can be implemented, or under which conditions, there might come to reducing an effective competition, and therefore to the negative impact on the market and thus on consumers.

For both breaches, the Office imposed fines on the undertaking in accordance with the relevant provisions of the Acts, in the total amount of EUR 21 million.

The decision has not entered into force, the party to the proceeding can lodge an appeal against it within the statutory period.