This content is from: Local Insights

Merger control

Merger control in Macedonia is regulated by the Law on Protection of Competition (LPC). Its purpose is to ensure free competition on the domestic market in order to encourage economic efficiency and consumer welfare.

Merger control is preventive in nature and consists of the legal requirement for participants in a concentration to file a notification for concentration before the Macedonian Commission for Protection of Competition, which will investigate if the concentration restricts or distorts competition.

The duty of notification is triggered if at least one of the three merger thresholds is present, namely:

  • if the aggregate worldwide turnover of all undertakings participating in the concentration exceeds €10 million ($14.8 million), where at least one participant must be registered in Macedonia;
  • if the aggregate Macedonian turnover of all undertakings participating in the concentration combined exceeds €2.5 million; or
  • if one of the participants has a market share of more than 40% in Macedonia or if the combined market shares of all participants is more than 60% in Macedonia.

Under the LPC, the aggregate turnover consists of the revenues generated from the sale, loaning or leasing of typical products of the undertaking, as well as the revenues generated from typical services that the undertaking provides, after deduction of the sale rebates, VAT and other taxes directly related to turnover. However, if one of the participants is a related undertaking, all undertakings related in this way will be regarded as one undertaking when calculating the aggregate turnover. In this case, the revenues generated from goods and/or services will not be taken into consideration.

The participants are obliged to notify the commission before the implementation of concentration and following the conclusion of the merger agreement, or the announcement of the public bid on the purchase or acquisition of the controlling interest in the charter capital of the undertaking.

The commission is obliged to render its decision within 25 working days of the day of receiving the complete notification. The concentration itself cannot take legal effect: that is, it must not be performed until a notification is filed and the commission reaches its decision.

A violation of the notification duty incurs an administrative fine of up to 10% of the value of the aggregate annual turnover of the participant made in the business year preceding the year when the violation was committed.

Metodija Velkov

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