PERU Law and Practice Contributed by: Alfred Kossuth Wieland and Edgardo Bernal Santos, Thorne, Echeandia & Lema Abogados
becomes optional and no prior approval is required. In advance of submitting a formal filing, the parties may also seek informal, non-binding guidance from INDECOPI through a preliminary consultation process regarding the applicability of the regime and the infor - mation requirements. The formal review process for mandatory filings con - sists of several stages. It begins with the submission of a notification including the relevant background information and an initial assessment of potential effects on the relevant markets. This is followed by a preliminary review conducted by INDECOPI’s Techni - cal Secretariat to verify compliance with the formal requirements, which must be completed within ten business days and may involve requests for additional information. The substantive assessment is then carried out by the Commission for the Defence of Free Competition, starting with a first-phase review to determine whether the transaction raises competition concerns, gener - ally within a period of 30 business days. If potential risks are identified, the review proceeds to a second- phase investigation involving a more in-depth analy - sis, which may last up to 90 business days, with a possible extension of an additional 30 business days. The procedure concludes with a reasoned decision authorising the transaction unconditionally, approv - ing it subject to remedies, or prohibiting it altogether. Such decision may be challenged through the relevant judicial remedies. 6.2 Criteria for Antitrust/Competition Review The merger control regime requires INDECOPI to assess the effects of a business concentration trans - action in order to determine whether it would result in a significant restriction of competition within the relevant markets. In conducting its review, INDECOPI examines a range of factors, including: • the structure of the affected market; • the actual or potential competition among the eco - nomic agents involved; • the evolution of supply and demand for the rel - evant products or services; • the distribution and marketing channels;
• legal or other barriers to entry, such as technologi - cal limitations, specific investment requirements, or horizontal and vertical restraints; • the economic and financial strength of the parties involved; and • the creation or strengthening of a dominant posi - tion. As part of its assessment, INDECOPI also considers whether the merger may produce economic efficien - cies, which can include productive, allocative or inno - vation efficiencies. These efficiencies must be: • demonstrated by the notifying parties; • inherent to the concentration itself; • capable of offsetting any identified anti-competitive effects and enhancing consumer welfare; • transferable to consumers; and • verifiable by the authority. Notwithstanding the above, INDECOPI has clarified that the mere creation or strengthening of a domi - nant position does not in itself constitute grounds for prohibiting a concentration transaction. Rather, it is necessary to evaluate the actual restrictive effects on competition in the markets where the economic agents operate. 6.3 Remedies and Commitments During the course of the prior control review proce - dure, economic agents may submit to INDECOPI a proposal of commitments aimed at preventing or miti - gating any potential effects that may arise from the merger. Such commitments may be based on factors involving: • the generation of efficiencies, in accordance with the criteria set out in 6.2 Criteria for Antitrust/ Competition Review ; • the bargaining power of customers, to the extent that such power would prevent the acquiring entity from increasing prices; or • the recovery of a failing firm, allowing the parties to demonstrate that, without the concentration transaction, the distressed company and its assets would likely exit the market in the near future due to the inability to meet its financial obligations.
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