COSTA RICA Law and Practice Contributed by: Claudio Donato Monge, Marco Lopez, Claudio A Donato Lopez and Carolina Retana, Zurcher, Odio & Raven
4.2 Markets Affected by a Transaction Generally, horizontal and vertical mergers are ana - lysed in more depth than conglomerate transactions, where a favourable presumption is applicable. The parties’ market shares have an impact on whether or not the Competition Commission considers that there is potential for anti-competitive effects. Howev - er, low market shares do not waive the requirement to analyse the market. In transactions where the parties hold lower market shares, it is much more likely that the Competition Commission will follow a one-phase process and authorise the transaction more expedi - tiously. 4.3 Reliance on Case Law The authorities frequently rely on case law from oth - er jurisdictions, mainly the USA and the EU. How - ever, other jurisdictions are also referenced, such as Colombia and Mexico. 4.4 Competition Concerns There is no exhaustive list of competition concerns that the Competition Commission may analyse. As such, the Competition Commission will investigate unilateral effects, co-ordinated effects, conglomerate or portfolio effects, vertical concerns and the elimina - Economic efficiencies are mainly considered when - ever the transaction may result in an anti-competitive effect (second phase). Any economic efficiency may be considered (reduc - tion of costs, economies of scale, complementary services, avoiding losing a participant in the market, consumer benefits, etc). An example of how economic efficiencies are reviewed would be a transaction that generates economies of scale that enable a company to reduce its costs and lower its final prices. 4.6 Non-Competition Issues Non-competition-related issues should not be relevant in the review process. One of the main reasons why the ASCA was enforced was to grant Coprocom more independence to ensure that there is no interference of government interests other than those protected by tion of potential competition. 4.5 Economic Efficiencies
competition law, as part of recommendations issued by the OECD in 2020. Prior to the ASCA’s entry into force, there were concerns about the interference of the Ministry of Economy over Coprocom, but these concerns have now diminished. There are no specific rules for foreign direct invest - ment or foreign subsidies regarding competition dis - position. The only restrictions are general limitations imposed by the law on certain sectors (energy, mari - time terrestrial land, etc). Foreign direct investments or foreign subsidies require a filing as long as they repre - sent a change of control over an entity that executes commercial activities in Costa Rica. For example, if such subsidies would imply that the subsiding entity gains voting rights over the subsidised entity, such transaction can be subject to merger control if thresh - olds are met. However, it is a complex hypothetical situation, and there is no similar precedent that has been analysed by Coprocom. 4.7 Special Consideration for Joint Ventures Joint ventures are analysed based on the same rules as any other concentration. Possible co-ordination issues are considered as part of the joint venture analysis. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions Coprocom is empowered to interfere through condi - tioning and to prohibit a transaction that had not been notified. In order to reject a concentration and block a transac - tion, Coprocom only needs to demonstrate that the concentration causes a significant anti-competitive effect that is not mitigated either by the pro-compet - itive effect of the transaction or by the remedies sug - gested by the parties (if applicable). If the transaction is not authorised, the parties may not close and shall find an alternative solution.
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