NIGERIA Law and Practice Contributed by: Chiagozie Hilary-Nwokonko, Chukwuyere Ebere Izuogu and Priscilla Bidemi Ben-Okoh, Streamsowers & Köhn
4. Substance of the Review 4.1 Substantive Test
it may be local, state-wide, regional, national or wider (transcending national boundaries). Although neither the FCCPA nor the FCCPC explicitly mentions a “de minimis level,” a merger or acquisi - tion involving two or more companies that operate in the same product or geographic market is eligible for notification through the simplified procedure if their combined market share is less than 15%. The FCCPC states that this simplified procedure may be applica - ble for mergers that do not pose significant concerns regarding competition. 4.3 Reliance on Case Law As a matter of practice, the FCCPC allows the merger parties to rely on cases and theories from Nigeria and other jurisdictions as judicial precedents when articu - lating their views on the overall impact of the merger on market competition. There is no preference for cases from any particular jurisdiction; what is most relevant is that the cases and theories relied on by the parties are applicable to the views they advance. 4.4 Competition Concerns In reviewing mergers, the FCCPC is concerned about the following anti-competitive harms that can arise from those mergers: • unilateral effects in a horizontal merger that involves two competing firms and removes the rivalry between them, allowing the merged firm to raise prices profitably; • co-ordinated effects in either a horizontal or non- horizontal merger that enables or increases the ability for several firms within the market (including the merged firm) jointly to increase prices because it creates or strengthens the conditions under which they can co-ordinate; and • vertical or conglomerate effects that may arise principally in a non-horizontal merger that creates or strengthens the ability of the merged firm to use its market power in at least one of the markets, thus reducing competition. The FCCPC’s approach to the assessment of these harms is set out in the MRG. The CBN and NCC may
Section 94 (1) of the FCCPA requires the FCCPC to undertake two levels of review. At the first level, the FCCPC will determine whether the merger is likely to substantially prevent or lessen competition (SPLC) in a relevant market in Nigeria. Where the outcome of the FCCPC’s review is negative, the merger will be approved. However, where the FCCPC determines that an SPLC situation does exist, it will undertake a second-level review that involves an in-depth sub - stantive assessment of the merger. At this level, the FCCPC will also examine whether factors such as effi - ciency and public interest considerations can offset or reverse the SPLC situation. The CBN will assess a merger on whether or not it is likely to lead to an SPLC situation in a relevant financial services sector market. The NCC will assess a merger on whether it is capable of a substantial lessening of competition or would result in a dominant position in a relevant communications market in Nigeria. 4.2 Markets Affected by a Transaction As a general principle, the FCCPC would not assume that the merging parties operate in the same relevant market(s), even when there appears to be some over - lap between their products and the geographic are - as in which they conduct business. In addition, the FCCPC considers that the relevant market(s) being analysed for competitive effects may not necessar - ily correspond to the product categories or service areas established by the merging firms or their rivals for operational purposes. Thus, the conceptual framework adopted by the FCCPC within which relevant information can be organised to assess the competitive effect of a merg - er is, in the first instance, to identify the products or services and geographic area in which competition may be harmed. In this regard, the FCCPC defines the relevant product market in terms of the set of products that customers consider to be close substitutes, while the relevant geographic market is defined in terms of the location of suppliers; this includes those suppliers that customers consider to be feasible substitutes and
461 CHAMBERS.COM
Powered by FlippingBook