CHILE Law and Practice Contributed by: Francisca Levin, Benjamín Torres, María Paz Dulanto and Antonia Silva, Cuatrecasas
and 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds . 2.11 Power of Authorities to Investigate a Transaction If a transaction does not meet the jurisdictional thresh - olds, the FNE can open an ex officio investigation to analyse its potential effect on competition, within one year of its closing. If, after such investigation, the FNE concludes that the transaction substantially reduced competition, it has three years following the closing of the transac - tion to challenge the transaction before the TDLC. In this context, the FNE can request the TDLC to impose remedies or even the reversal of the transaction. FNE Ex Officio Investigations As noted in 2.2 Failure to Notify , the FNE has opened several ex officio investigations where it had initial doubts about compliance with mandatory notifica - tion rules and/or the transaction’s competitive effects. These investigations generally involve significant play - ers, either those in concentrated markets or large companies likely to exceed the thresholds. Volun - tary notification is therefore advisable in exceptional cases (see 2.1 Notification ) where parties face these scenarios, need comfort that the transaction poses no competitive risks, or have doubts about whether thresholds are met. Navimag Case The only precedent since the mandatory merger con - trol regime came into force in which the FNE chal - lenged a completed transaction before the TDLC for substantial lessening of competition and sought sanctions despite the transaction not meeting rel - evant thresholds is in FNE v Navimag Carga S . A ., Case C-433-2021, in which Navimag acquired its only competitor in the roll-on/roll-off freight market on a local maritime route in Chile. Navimag settled the case offering remedies and a payment of approx. USD400,000. 2.12 Requirement for Clearance Before Implementation Notifications have suspensory effects (standstill obli - gation). The parties cannot implement the transaction
The concept of “effects in Chile” or local nexus is not defined in the law. According to the Guidelines on Jurisdiction, a transaction is considered to have a sufficient nexus with Chile where the parties can be linked to Chile in terms of sales, presence (activities or assets), and/or affected customers or consumers in Chile. When a target has no sales in Chile, a filing would not be required, as the transaction would not meet the applicable individual turnover threshold, as explained in 2.5 Jurisdictional Thresholds . 2.9 Market Share Jurisdictional Threshold Chilean merger control law does not establish a mar - ket share jurisdictional threshold. 2.10 Joint Ventures Joint ventures are subject to merger control when the transaction creates an independent full-function eco - nomic entity, and the sales in Chile of the economic agents that associate, and their respective business groups, pass the relevant thresholds, as explained in 2.5 Jurisdictional Thresholds and 2.7 Businesses/ Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds . This hypothesis does not consider decisive influ - ence or control to be relevant. The key is that the new independent economic agent created can perform its functions on a permanent basis – that is, a full- functionality criterion is adopted – regardless of its legal form. A joint venture would be considered full-function if it is completely autonomous and has the possibility of performing its activities in the market. Such legal and economic autonomy does not necessarily imply that the new undertaking cannot be controlled in its stra - tegic decisions by its constituents but instead means that the joint venture enjoys autonomy in an opera - tional and functional sense. There are no special rules for determining whether joint ventures meet the jurisdictional thresholds, beyond those previously stated in 2.5 Jurisdictional Thresh- olds , 2.6 Calculations of Jurisdictional Thresholds
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