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MERGERS: AMO SR imposed a fine on the undertaking EP Industries, a.s., for the failure to notify the merger and its implementation

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On 28 May 2018 the Antimonopoly Office of the Slovak Republic, the Division of Concentrations, (hereafter "the Office") issued a decision by which, pursuant to the Article 38 Paragraph 1 Letter c) and d) of the Act No. 136/2001 Coll. on Protection of Competition (hereafter the "Act"), imposed a fine in the amount of EUR 18 000 on the undertaking EP Industries, a.s., seated at Pařížská 130/26, 110 00 Praha 1, the Czech Republic (hereafter "EPI").
 
The undertaking EPI infringed the provision of the Article 10 Paragraph 7 of the Act by failing to notify the merger grounded in the acquisition of direct exclusive control of the undertaking EPI over the undertaking SLOVENSKÉ ENERGETICKÉ STROJÁRNE, a.s., seated at Továrenská 210, 935 28 Tlmače (hereafter "SES Tlmače"), which was established on 30 September 2016 in the way stated in the decision of the Office No. 774/2017/OK-2017/FV/3/1/028 before starting to exercise the rights and obligations arising therefrom.
 
At the same time, the undertaking EPI infringed the provision of the Article 10 Paragraph 11 of the Act by exercising the rights and obligations arising out of the merger before the Office´s decision coming into force. The infringement of the undertaking EPI was based on acquiring the shareholder's rights as a shareholder of the joint-stock company SES Tlmače by the day of registration of the capital increase in the business register.
 
The basic principle of the merger assessment system is ex ante control. A precondition for effective merger control preventing a permanent and irreparable distortion of competition is that the mergers which are subject to the control of the Office are notified to the Office before exercising rights and obligations arising therefrom.
 
Prohibition of implementation under the Article 10 Paragraph 11 of the Act means that the undertaking must not exercise the rights and obligations arising from the merger. The purpose is to prevent the rights and obligations arising from the merger from being exercised at a time when it is not clear what its impact on competition is.
 
In imposing the fine, the Office came out mainly of the gravity and duration of the infringement (in the case of the implementation of the merger in question). In the context of gravity, among other things, it took into account the fact that the Office ultimately issued a decision approving the merger and, in the event of a breach of the Article 10 Paragraph 11 of the Act it took into account the extent of acts committed by the undertaking EPI in this case of the infringement.
 
The decision came into force on 13 June 2018.