The Moroccan Competition Council which was reactivated in 2019 has recently adopted its first gun jumping decisions. It has also introduced a form of leniency until the end of the year for previous transactions which have not been notified (the so called "regularization procedure"). This comes in the context of a broader upcoming reform of competition rules in Morocco, which will notably introduce new merger control thresholds.
1. FIRST GUN JUMPING DECISIONS
Pursuant to Article 14 of Law n°104-12 (the "Competition Law"), parties are not entitled to implement a transaction before the Moroccan Competition Council (the "Council”) has cleared it ("suspension principle"), provided that it :
- constitutes a concentration within the meaning of competition rules ; and
- meets one of the alternative thresholds currently foreseen in the Competition Law.1
In the event of a breach of the suspension principle, the party which acquired control shall notify the transaction to the Council subject to a daily penalty. It may also be sanctioned with a fine corresponding to up to 5% of the Moroccan turnover of its most recently completed financial year to which the turnover achieved by the acquired company for the same period shall be added (Article 19 of the Competition Law).
On 28 April 2022, the Council adopted its first gun-jumping decision against the Swiss company Sika in the context of its acquisition of Financière Dry Mix Solutions2 with a fine amounting to MAD 11.670.215 (corresponding to approx. EUR 1.1 million). The transaction was also notified in parallel and cleared unconditionally by the Council on 30 May 2022.3
This transaction was examined by the Council in parallel and independently of its review of the Sika / MBBC transaction which was cleared on 29 September 2022 subject to commitments following an in-depth investigation (Phase 2).4
Since then, the Council has adopted two additional and separate gun jumping decisions on 29 September 2022 for failure to notify previous transactions in Morocco by an investment fund.5
The fine applied in each of these decisions was MAD 10.6 million (corresponding to approx. EUR 1 million).6
These procedures were opened ex-officio by the Council.7
2. THE RECENT INTRODUCTION OF "REGULARIZATION" PROCEDURE
The Council has launched a procedure of regularization of non-notified concentrations on 24 June 20228 which it clarified in two decisions dated respectively 31 August 20229 and 29 September 2022.10
The conditions as currently set out in those decisions can be summarized as follows:
Companies shall declare before 31 December 2022 their previous transactions which were not notified to the Competition Council.
(ii) Content of the declaration
There is no template at this stage. However, the Council has clarified that it shall contain the explicit commitment of the party not to contest the procedure and the decision
(iii) Transactions concerned
The procedure concerns transactions which intervened between 1 January 2019 and 31 December 2021. Before that date a declaration (and filing) can be made, but no fine will be applied.
The transaction must not be subject to an on-going procedure.
(iv) Reduced fine
If the conditions are met, a reduced fine corresponding to 1% of the Moroccan turnover (instead of the maximum fine of up to 5%) will apply, with a cap of:
- MAD 500 000 (approx. EUR 50 000) for joint venture not achieving turnover yet.
- MAD 4 000 000 (approx. EUR 400 000) for each transaction.
- MAD 10 000 000 (approx. EUR 1 000 000) in case of several transactions not notified by the same group of companies, provided that all transactions are mentioned in the same declaration.
1 The alternative thresholds are currently the following: (i) the total combined worldwide turnover, excluding taxes, of all undertakings or groups of legal or natural persons party to the contemplated concentration exceeds MAD 750 (i.e. ~ EUR 70 million) (worldwide turnover threshold); or (ii) the total turnover, excluding taxes, achieved in Morocco by at least two undertakings or groups of legal or natural persons party to the contemplated concentration exceeds MAD 250 million (i.e. ~ EUR 23 million); (Moroccan turnover threshold); or (iii) the undertakings that are parties to the concentration, or that are the subject of the concentration, or the undertakings that are economically linked to them, have generated altogether, during the previous calendar year, more than 40% of the sales, purchases or other transactions on a national market of identical or substitutable goods, products or services, or on a significant part of such market (market share threshold).
2 Press release concerning the failure to comply with the obligation to notify the transaction involving the acquisition by Sika AG of sole control of Financière Dry Mix Solutions
3 Press release concerning the clearance by the Council of the acquisition by Sika AG of Financière Dry Mix Solutions
4 Decision n° 102//ق2022 issued on 29 September 2022 available in Arabic on the Council's website
5 Decisions issued on 29 September 2022 available in Arabic on the Council's website : https://conseil-concurrence.ma/cc/wp-content/uploads/2022/09/Decision-sanction-Lone-Star-MBCC-LSF11.pdf ; https://conseil-concurrence.ma/cc/wp-content/uploads/2022/09/Decision-Sanction-LSF10-Flavum-Holding-S.a.r.l.pdf.
6 All revenue figures have been converted from MAD to EUR on October 2022 (1 MAD = 0.093369427 EUR) on https://www.xe.com
7 Please note that Decree No. 2-14-652 of 1 December 2014 implementing Law n°104-12 requests the parties to provide in the context of their notification to the Council the list of transactions they achieved in the last three years.
8 Decision issued on 24 June 2022 available in Arabic on the Council's website : https://conseil-concurrence.ma/cc/ar/wp-content/uploads/sites/2/2022/06
9 Decision issued on 31 August 2022 available on the Council's website : https://conseil-concurrence.ma/cc/wp-content/uploads/2022/09/90-Decision.
10 Decision issued on 29 September 2022 available in Arabic on the Council's website : https://conseil-concurrence.ma/cc/wp-content/uploads/2022/09/Regularisation-OCE.-3.3.-NEW-II.pdf