CHILE Law and Practice Contributed by: Francisca Levin, Benjamín Torres, María Paz Dulanto and Antonia Silva, Cuatrecasas
2.2 Failure to Notify Consequences of Failure to Notify and of Procedural Merger Control Infringements
Publicity of Imposed Penalties Any sanctions imposed for merger control infringe - ments are public, as they may only be ordered by the TDLC through a public judicial proceeding. 2.3 Types of Transactions Any transaction that results in two or more previously independent economic agents belonging to different business groups ceasing to be independent, in any area of their activities, may be subject to merger con - trol. This cease of independence may occur through merg - er, acquisition of decisive influence or control (includ - ing negative control), creation of a full-function joint venture (regardless of its control structure), or acquisi - tion of control over relevant competitive assets. Internal restructurings or reorganisations within the same business group are not subject to merger con - trol, as the cease of independence test would not be met by same-business-group transactions. Transactions not involving share or asset transfers may also be caught. Any transaction that changes an undertaking’s control structure – through contrac - tual arrangements, shareholders’ agreements, bylaw amendments or otherwise – may be subject to merger control if it confers decisive influence. 2.4 Definition of “Control” The FNE’s Guidelines on Jurisdiction define control as the ability to determine, or veto, decisions relating to the strategy and competitive behaviour of another economic agent. The acquisition of a minority shareholding may con - stitute an acquisition of control where it grants the acquirer the ability to veto or block competitively sig - nificant decisions of the target (ie, negative control). As a result, acquisitions of interests falling short of a majority shareholding may still be subject to merger control. The concept of control for merger control purposes differs from the concept of corporate control under Law No. 18,045 (Securities Market Law). While the latter is relevant primarily for the calculation of juris -
If the parties fail to notify a transaction subject to man - datory merger control, the FNE may initiate proceed - ings before the TDLC, which may impose any of the sanctions available including: • the amendment or termination of the relevant acts, agreements or contracts; • the amendment, dissolution or restructuring of the entities involved; and • fines of up to: (i) 30% of the sales of the offender in the relevant product or service line relating to the infringement, for the entire period of the infringe - ment; (ii) twice the economic benefit obtained from the infringement; or (iii) in case neither of the above can be determined, up to approx. USD52 million. In cases involving the failure to notify a reportable transaction, the TDLC may also impose an additional fine of up to approx. USD20,000 for each day that the transaction remained unnotified following its imple - mentation. Fines cannot be imposed directly by the While to date no sanctions have ever been imposed for a failure to notify, there is a precedent involving gun-jumping conduct concerning a transaction that was implemented while FNE clearance was still pend - ing. For such conduct, the FNE requested fines, as described in 2.13 Penalties for the Implementation of a Transaction Before Clearance . FNE, as it lacks sanctioning powers. Penalties Imposed for Failure to Notify Recently, the FNE has opened several ex officio inves - tigations into underreported transactions to assess whether mandatory filing obligations were breached and/or whether the transaction affected competi - tion. These investigations are relatively common (see “Monitoring of Transactions Not Subject to Mandatory Notification” in the Trends & Developments article) and have involved significant players across various sec - tors (eg, fruit exports, event production and ticketing, ice cream, ski resorts, private hospitals and shopping centres). To date, none has led the FNE to challenge a transaction before the TDLC for failure to notify.
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