The Spanish Parliament definitively approved the Sustainable Economy Act (the 'SEA') (Ley de Economía Sostenible) on 15 February 2011. The legislation will come into force the day after its publication in the Spanish Official State Gazette, which is expected imminently.
The SEA introduces a major change to the Spanish merger control regime. The SEA amends the current jurisdictional thresholds for the application of the Spanish merger control rules, which are set out in article 8.1 of the Spanish Competition Act.
At present, a merger must be reported to the Spanish authorities if any party controls more than 30 per cent of the market – or will do as a result of the acquisition. The SEA introduces a new de minimis exception to the mandatory notification system in terms of which merging companies will not need to notify a deal. This exception is to apply where the Spanish turnover of the target company does not exceed €10 million – provided the merged entity does not control more than 50 per cent of any market in Spain
It is expected that this change will remove regulatory constraints and reduce the number of filings before the CNC (it is notable that since the Spanish Competition Act was passed in 2007, 104 out of 175 cases were notified to the CNC on the basis of the 30 per cent market share threshold alone). Some legal uncertainty will however remain due to the continuing obligation to define the relevant market and in small markets, companies can easily have high market shares.
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