OECD kpcdb

1. Scope

 

Single dominant entities are prohibited from undertaking business combinations that lead to a restriction of competition.

 

There are 3 categories of business combinations: (i) interlocking directorates, (ii) acquisition of shares, (iii) mergers. Unlike, the first two categories, the latter category applies both to businesses that already have a dominant position or that will acquire it via the transaction.

 

Article 8 of the Competition Law requires a dominant business entity to submit an application for authorisation to the AFCCP in the case of:

 

a)  restructuring through consolidation and merger;

b)  purchasing more than 20% of common stock or more than 15% of preferred stock from a competitor;

c)  merging with related party (i.e. party considered as the same entity for taxation purposes).

 

The refusal of the AFCCP is grounds for non-registration of the business entity following the merger (Article 8.4).

2. Notification

The Competition Law does not provide for a notification procedure or system.

3. Procedural Rules

Upon receipt of an application, the AFCCP must make a decision within a period of 30 days, extendable up to another 30 days.

4. Assessment

For the concept of dominant position see Section III.2 above.

 

Article 8.5 provides for an exception to the prohibition of 8.3, where the application shall not be rejected if the benefit to the national economy exceeds any restrictions to competition.

5. Remedies and sanctions

According to Article 27, dominant enterprises that undertake business combinations that fulfil the conditions of Article 8.1 without notifying the AFCCP, are subject to a fine of up to MNT20 million.

 

The imposition of a fine normally follows a cease and desist order by the inspector, who seeks to stop the unlawful practice within a specified period of time, which is 10 days on average.

 

The Competition Law leaves space for behavioural remedies after the merger is implemented, but does not provide for structural remedies.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).