Following the first decision sanctioning a company for failure to notify a merger, the Competition Council set up a settlement procedure offering operators who so wish the possibility of regularising their situation. This regularisation procedure was the subject of three decisions by the Competition Council dated 24 June 2022, 31 August 2022 and 29 September 2022, the main provisions of which are summarised in this note.
1. What is the relevant period?
The regularisation procedure was implemented by the decision of 24 June 2022 and will end on 31 December 2022.
2. Which transactions are eligible?
The regularisation procedure is aimed at merger operations that have occurred before 31 December 2021.
The Competition Council distinguishes between transactions that took place between 1 January 2019 and 31 December 2021, the regularisation of which will be subject to a sanction, and mergers that took place before 1 January 2019, which may be regularised without being subject to a financial sanction.
3. What is the amount of the financial penalty?
The Competition Council set the amount of the penalty at 1% of the turnover of the company involved in the previous year. The payment of the penalty is the responsibility of the company or companies that should have submitted the notification. In its latest decision of 29 September 2022, the Competition Council set the following caps: a maximum of MAD 4 million per transaction and a maximum of MAD 10 million in the event of the regularisation of several transactions carried out by the same group.
The penalty for carrying out a merger without notification outside the regularisation procedure can reach up to 5% of the turnover of the previous year of the companies involved.
4. What is the settlement procedure?
The regularisation procedure must be initiated by a letter from the company wishing to benefit from this settlement procedure. The settlement agreement concluded between the company and the Competition Council must mention the amount of the financial penalty as well as the company’s commitment not to contest this agreement before the courts. At the same time, the company will have to notify the transaction that has been carried out in order to obtain the authorisation of the Competition Council.
It should be noted that this notification procedure will be carried out under the same conditions as a classic notification and that the Competition Council may not authorise the transaction or may authorise the transaction subject to compliance with commitments that may be made by the company.
5. The special case of greenfield joint ventures
The decision of 31 August 2022 deals more specifically with the regularisation operations of companies that had no turnover at the time of the transaction. This concerns the creation of so-called “greenfield JVs”. In this particular case, the amount of the financial penalty is set at a fixed rate of MAD 500,000.
