Antritrust Regulations - New Rules for Summary Filings

The CNDC has published Provision 156/2024, introducing amendments to the summary filings procedure (PROSUM) and updating the technical criteria to be included within said procedure.

This Provision specifies in which cases economic concentration transactions, notified in accordance with art. 9 of Law 17,442, may be processed under the Summary Procedure, with the following technical criteria being necessary for their inclusion:

·     Conglomerate concentrations;

·   That involves a change in the nature of control over the object of the operation, moving from a situation of joint control to one of exclusive control, being acquired by one of the pre-existing controllers;

·    Horizontal concentrations, with a combined share of less than 20% of the relevant markets affected;

·    Horizontal concentrations, with a joint participation of less than 50% of the relevant markets affected and an increase in the HHI (Herfindahl-Hirschman Index) of less than 150 points;

·   Vertical concentrations, if the individual shares of each vertically linked market are less than 30%.

Similarly, the technical criteria for exclusion from the Summary Procedure (PROSUM) are stipulated:

·  If the parties fail to provide the information and documentation necessary to determine the scope of the transaction in any of the assumptions;

·    When the post-transaction HHI (Herfindahl-Hirschman Index) in an affected market is greater than 2,500 points;

·  When there are indications that a transaction eliminates a current or potential competitor

·   Where there are indications that a transaction combines two important innovative entities;

·    Where there are indications that the notified transaction may impede the expansion of competitors ;

·    When there are indications that a company already established in the market intends to acquire a small but innovative company, in order to use its technology or to deactivate it;

·   Where there are indications that a transaction seeks to significantly increase the market power of the Parties through a combination of technological, financial or other resources, even if these entities do not operate in the same market;

·   When there are indications that the notified transaction may generate portfolio effects;

·      When a regulatory entity opposes the ordered transaction (art. 17 Law 27.442);

·      When the CNDC considers that more information is required for analysis.

These are the updated technical criteria for inclusion and exclusion for entry into the Summary Procedure system.

In addition, pursuant to Provision 156/2024, an increase in the joint market share threshold is observed, from 30% (thirty percent) to 50% (fifty percent), in certain cases provided for horizontal concentrations. Likewise, some exclusion criteria contemplated in the previous Provision 62/2023 are eliminated, specifically points i), j) and k) of article 4, which regulated aspects related to joint ventures, modalities of corporate participation, control structures and specifications applicable to certain sectors or specific areas. In turn, the term "indications" is incorporated in several requirements, granting greater discretion and analytical power to the CNDC, as in points c) to h).

In this sense, the new Provision 156/2024 adds additional specific scenarios, making it necessary to carry out a more rigorous analysis, without focusing primarily on high levels of concentration, but rather considering issues of efficiency and impact on competition of each individual transaction.