Aaron Chen & Sally Yang
The Fair Trade Committee (FTC) has enacted on August 17 of 2021 the ” Guidelines of FTC’s pre-consulting services for merger filing,” and on August 24 of the same year, issued amendments on “Notice for merger filing” and form of “Merger filing report.” The latter will go into effect on October 1 of the same year. Altogether, they suggest FTC’s attempt to simplify the requirements for mergers filing and strengthen the procedural predictability via its pre-consulting services. The main points are as follow:
1. Changes in Merger filing report and Notice for merger filing:
(1) Regarding businesses’ “sales data on merger-related goods/services,” those applicable under general filing procedures only need to fill in top 3 of their primary goods/services (5 was required before the amendment); those applicable under simplified filing procedures only has to fill in top 2 of their primary goods/services (3 was required before the amendment).
(2) Regarding “information of the market structure relating to horizontal competition,” a suggestion was added to provide the names of businesses ranked sixth to tenth in the relevant market, though their sales data is not required. However, since the “Merger filing report” states that this was only a “suggestion,” failure to provide such information should not constitute an incomplete filing subjected to supplement and corrections. Whether this is true will depend on FTC’s actual implementation in the future.
(3) Regarding “information of the market structure relating to upstream and downstream enterprises of the participating enterprises,” the remark explains that if there are no statistics on the total number of companies in the market, an estimate should be filled by the participating enterprises based on their market awareness.
(4) The procedural amendments for merger filing are as follows:
A. If the filing is submitted via paper, such filing must be submitted under its specified format, and the e-documents of the filing report and its appendix must be provided. Previously, businesses had to upload their filing documents to the FTC online filing system. After this amendment, the methods of providing the e-documents are no longer restricted.
B. If the filing is submitted via FTC’s online system, the businesses are exempt from providing the paper format. However, they are still required when the FTC deems an inspection necessary.
2. The main points on pre-consulting services provided by the FTC are as follow:
(1) Scope of the service:
A. Assist businesses in determining whether it meets the definition of a merger, whether it is qualified for a filing, and the entity that should submit the filing.
B. Advise on the relevant merger documents and the applicable procedures.
C. Assist in questions regarding filing and merger control that FTC deems necessary.
(2) Participating businesses requesting pre-consulting must specify the content of their inquiry, state the name of the companies intending to merge, their goods/services, transaction structure, markets that may be impacted, the estimated filing date, and provide other relevant merger documents.
(3) The limit on using the pre-consulting service for the same merger case is once only.
(4) The information and content provided by relevant personnel participating during the pre-consulting service shall be confidential.
(5) The opinions and recommendations provided under the pre-consulting service are for reference only and do not affect the FTC in making its final decision regarding the case.
The pre-consulting services promoted by the FTC show its strive to encourage a more transparent and predictable merger procedure. However, the businesses are required to reveal each company’s name and the “details” of relevant information. Furthermore, the opinions provided under the pre-consulting service are for reference only and do not affect the FTC’ reviewing of the case. Whether the aforementioned issues affect the effectiveness of the pre-consulting system is worth observing.