Merger Control 2021 Comparisons

Last Updated July 07, 2021

Contributed By FerradaNehme

Law and Practice


FerradaNehme is a well-known multidisciplinary law firm, located in Chile, focused on corporations, companies, institutions, and individuals. FerradaNehme’s practice areas are competition, corporate and M&A, public law, environment and natural resources, telecommunications and media, complex litigation, consumer law, compliance and technologies. FerradaNehme’s competition practice is one of the largest in Chile and the first in the country completely dedicated to this matter. This area is comprised of 20 lawyers and one economist, who are specialised in antitrust litigation, administrative procedures, compliance, mergers, acquisitions, and joint ventures, among others. As one of the most interdisciplinary practices in the law field, the aforementioned specialisations are related to, and also complement, other areas, with compliance, economic regulation and complex litigation being the most common.

The merger control legislation is established in:

  • Title IV of the Chilean Competition Act, Law Decree No 211 from 1973 (“DL 211”);
  • Exempt Resolution No 157 from 2019, from the National Economic Prosecutor’s Office (FNE for its Spanish initialism), that establishes the sales thresholds that trigger the obligation to file a notification before the FNE (“Resolution No 157”); and
  • Regulation No 33 from 2017, from the Ministry of Economy, that lists the information that must be submitted before the FNE when notifying a merger (“Regulation No 33”).

In addition, the FNE has issued guidelines related to the notification proceeding:

  • the Horizontal Merger Guidelines, 2012;
  • the Competition Guidelines, June 2017;
  • the Remedies Guidelines, June 2017;
  • the Thresholds Guidelines, August 2019;
  • the Instructions on Pre-Notifications of Mergers, May 2021; and
  • the Horizontal Merger Guidelines, May 2021, still under public consultation (“Draft of New Horizontal Merger Guidelines”).

Finally, the FNE has also provided forms to guide the notification filing (the Ordinary Notification Form and the Simplified Notification Form).

Law No 19.773 on the Freedom of Opinion and Information and the Practice of Journalism establishes the obligation to obtain a favourable report from the FNE in case of a modification or change in the ownership of media subject to the system of concession conceded by the State (for television and radio).

Law No 18.838 that Creates the National Television Council establishes the obligation to obtain authorisation from the National Television Council in case of transfer, assignment, lease or granting of the right to use, under any title, the right of free-to-air television broadcasting and to obtain the aforementioned authorisation. A previous favourable report from the FNE is necessary regarding the transaction.

The FNE oversees the procedure of merger control and has the authority to clear (unconditionally or subject to remedies) or block mergers. Only in such case that the FNE decides to block a merger, the parties can present a special review appeal before the Chilean Antitrust Court (TDLC for its Spanish initialism). An appeal can be filed against the decision of the TDLC in case it clears the merger subject to remedies different from those offered to the FNE by the merging parties.

When a merger is cleared subject to remedies, the FNE is in charge of ensuring that the parties comply with them.

Notification is compulsory when:

  • the operation is considered a merger under DL 211 (see 2.3 Types of Transactions); and
  • the sales thresholds established in the Resolution No 157 are met, in accordance with the criteria established in Article 48 of DL 211.

In the event that only the first bullet point is met, the parties can file a voluntary notification to make sure they have the FNE’s approval (Article 48, paragraph 8 of DL 211). The decision to file a voluntary notification will depend on a strategic analysis and the probability of the FNE opening an investigation, even though is not mandatory to file a notification.

Penalties can be imposed on firms that fail to notify mergers that were subject to the mandatory control regime. For those penalties to be imposed, the FNE must file a complaint before the TDLC for the Tribunal to decide whether an infringement took place and, in the affirmative, which corresponding sanction should be imposed.

The penalties that may be imposed are the same that are applicable to any competition infringement, the most common of which are the following.

  • Fines up to 30% of the sales of the products or services involved in the transaction; or double the amount of the benefits obtained. If those parameters cannot be determined, the TDLC can impose a fine of up to almost EUR 43.1 million approximately.
  • An order to modify or terminate acts, contracts, covenants, systems, or agreements, which may involve the order to undue or modify the merger.

Also, fines up to EUR 14,378 approximately for each day of delay to file the mandatory notification, starting on the day of the merger execution can be imposed.

Sanctions can also be applied in case the parties breach the obligation to not materialise the merger until obtaining the FNE’s clearance decision (Article 49 3 bis letter b of DL 211) or if they provide false information when submitting the notification (Article 3 bis letter e of DL 211).

The transactions that are subject to the merger control regime are those that can be defined as “operations of concentration” according to Article 47 of DL 211. Operations of concentration are any fact, act or agreement, or group of them, that has the effect that two or more economic agents that are not part of the same business group and that are not part of the same corporate group and who were previously independent of each other, cease to be independent of each other in any area of their activities by means of any of the following ways:

  • by merging, whatever the form of corporate organisation of the merging entities or of the entity resulting from the merger (“merger”);
  • acquiring, one or more of them, directly or indirectly, rights that allow them, individually or jointly, to decisively influence the management of another (“acquisition of rights”);
  • by associating under any modality to form an independent economic agent, different from themselves, that performs its functions on a permanent basis (“joint venture”); or
  • acquiring, one or more of them, control over the assets of another under any title (“acquisition of assets”).

Each of these hypotheses is addressed in the Competition Guidelines.

In general terms, it is possible to sustain that internal restructuring or reorganisation within the same company will likely not be caught by the Chilean merger control regime, as long as they do not cause the cease of the independence of two or more economic agents.

Operations not involving the transfer of shares or assets can be caught by the Chilean merger regime. For instance, a shareholders’ agreement that causes a change in the type or quality of control, can be subject to merger control as well. That is also the case of joint ventures.

Interrelated Transactions

It may be relevant to consider that the Competition Guidelines indicate that interrelated transactions may be treated as a single concentration as long as ultimate control is held by the same economic operator, even if at different stages of the transaction control is held by the same economic operator, even if different economic operators have been involved in the different stages (Sections 29–30 of the Competition Guidelines) and that two or more transactions between the same economic agents over a period of two years. It is reasonable to conclude that these tend towards a single concentration when analysed together (Section 31 of the Competition Guidelines).

Finally, it must be considered that in the case of other relevant transactions that take place after the notification has been made, it will be necessary to inform that circumstance to the FNE (Section 116–119 of the Competition Guidelines).

DL 211 does not define control but the Competition Guidelines contain relevant references to the concept. The Guidelines indicate, firstly that control and decisive influence must be regarded as synonymous; and, secondly, that they must be understood as the possibility to determine, de jure o de facto, individually or jointly, and positive or negative decisions which effect the strategy and competitive behaviour of the economic agent. The possibility to veto decisions regarding strategy and competitive behaviour of the economic agent can also cause control. Therefore, the notion of control includes positive and negative, individual and joint, and de jure and de facto control.

Therefore, not only shareholding can create the existence of control: that can also be the case when a firm has the possibility to appoint the majority of the board, relevant executives of the administration or legal representatives, or when a firm has the ability to veto or block decisions like the entrance to new markets, the business plan, the approval of the budget, the appointment of managers and main executives and the authorisation of certain investments.

Non-structural Joint Ventures and Non-controlling Minority Shareholdings

Non-structural joint ventures and the acquisition of non-controlling minority shareholdings are not considered a merger under the merger control regime. However, they fall under the general provision of Article 3, paragraph I of the DL 211 and as a result could be assessed under the general antitrust provisions.

Also, the acquisition of a non-controlling minority shareholding of more than 10% of direct or indirect ownership of a competitor must be informed to the FNE within 60 days of the acquisition (Article 4 bis of DL 211). The aforementioned obligation only emerges when the following threshold is met: the turnover of the acquiring company (including its corporate group) and the target company in Chile in the financial year preceding the transaction is at least EUR3.3 million approximately. Once the FNE receives the notice, it is can launch an investigation to assess the effect of said acquisition under the general provisions (and not under the merger control provisions).

It must be noted that if a minority shareholding acquisition allows an economic agent to control or exert decisive influence over the acquired firm or assets, it may amount to a merger and, if it reaches the relevant thresholds, it must be notified before the FNE prior to its materialisation.

The thresholds have a general application to all types of mergers and apply to all markets. Thresholds were adjusted in 2019. Currently, to meet the thresholds:

  • the combined turnover in Chile of the parties in the financial year preceding the transaction is at least 2,500,000 Unidades de Fomento (UF) (EUR83.4 million approximately); and
  • the turnover in Chile of each of at least two of parties in the financial year preceding the transaction is at least 450,000 UF (EUR15 million approximately).

Thresholds are established in UF, a unit established by the Chilean Central Bank that adjusts in accordance with inflation (1 UF is equvalent to EUR33.3 as of 30 June 2021).

The Thresholds Guidelines provide specific guidance to determine if thresholds are met in the case of mergers involving:

  • banks or financial entities (Sections 29–32 of the Thresholds Guidelines);
  • insurance companies, reassurance companies, and pension fund administrators (Sections 33–36);
  • investment funds (Sections 37–40); and
  • state companies (Section 41).

To determine the meeting of the thresholds, the calculation must be made based on the sales of the economic agents in Chile during the financial year preceding the transaction. Therefore, it is not relevant whether the parties have presence in Chile.

Threshold Calculation

The Thresholds Guidelines establish the criteria for the threshold calculation.

Among others, it is noted that the calculation should exclude:

  • taxes related to sales volume (such as VAT), tariffs and other levies (Section 8 of the Thresholds Guidelines);
  • discounts (Section 8 of the Thresholds Guidelines);
  • sales or transactions made with other entities of its same business group, since only those made to third parties are considered (Section 9 of the Thresholds Guidelines); and
  • income not from the usual line of business or commercial activities normally carried out by the parties involved in the transaction (Section 10 of the Thresholds Guidelines).

Thresholds Specific to Certain Companies

There are also special rules for the calculation of certain companies (see 2.5 Jurisdictional Thresholds).

Thresholds in Relation to Overseas Activity

Sales under contracts established in Chile, but with the purpose to supply products or provide services to customers located outside of the country, should not be considered in the calculation of the thresholds (Section 23 of the Thresholds Guidelines).

In the case of sales made in a currency other than Chilean peso, the exchange rate to be used is the annual average published by the Central Bank of Chile for the year prior to the year in which the notification is made (see, in the following path: "Statistical Database", "Exchange Rates", "Nominal Exchange Rate"). In case the currency to be converted is not published by the Central Bank of Chile, then official sources of the country whose currency is used can be utilised in the calculation (Section 43 of the Thresholds Guidelines).

The value of the UF for such calculation will be the value as of December 31 of the year prior to that in which the notification is verified, also published in the Central Bank of Chile (Thresholds Guidelines, Section 44 of the Thresholds Guidelines).

In determining whether to aggregate the sales of the target alone, of the parties involved in the transaction and/or of their corporate groups, a distinction must be made in accordance with the type of concentration involved (see 2.3 Types of Transactions).

The criteria are set out in the Thresholds Guidelines.

In the case of mergers and joint ventures, the sales in Chile of both the economic agent involved in the transaction and its entire economic group must be accounted for. In this case, the determination of which entities are part of its corporate group is explained in the Thresholds Guidelines (Section 15 of the Thresholds Guidelines, which mirrors the provisions of Articles 96 et seq of Law No 18.045 of the Securities Market Law).

In the case of the Acquisition of Rights and Acquisition of Assets, the same rule applies with respect to the acquirer as indicated in the preceding paragraph. With respect to the target in a transaction consisting of an Acquisition of Rights, only the sales of the target and of the entities it directly or indirectly controls must be considered, but not those of its corporate group (Section 17 of the Thresholds Guidelines). In the case of Acquisition of Assets, and in relation to the assets being acquired, only sales generated from the assets over which control is sought to be transferred should be accounted for (Section 19 of the Thresholds Guidelines).

DL 211 does not explain how to reflect changes in the business during the reference period.

Foreign-to-foreign transactions are subject to merger control in Chile if the parties involved in the transaction have sales in Chile (Sections 110–111 of the Competition Guidelines). Therefore, the presence or absence of the economic agents in Chile is irrelevant.

With that being the case, filling can be required when a target has no assets in the jurisdiction, but it does have sales that are over the relevant thresholds.

Thresholds are determined by the economic agents’ sales, not their market shares. However, market share analysis will be relevant afterwards, for example:

  • to determine whether the notification must be made in accordance with the ordinary or simplified procedure, which basically involves providing more or less background information for the filing; or
  • whether a more detailed substantive analysis will be carried out, depending on whether the market is highly, moderately or less concentrated (see the Horizontal Merger Guidelines, 2012, and the Draft of New Horizontal Merger Guidelines).

Thus, if the sales thresholds are exceeded in a given transaction, but the parties involved in the transaction have no overlap in their activities, they must still notify the transaction, although they will do so under the simplified procedure.

Joint ventures may be subject to the mandatory control insofar as, in addition to the general requirements for such an association to be a concentration (see 2.3 Types of Transactions) and the sales thresholds (see 2.5 Jurisdictional Thresholds and 2.7 Business/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds) are exceeded, the conditions, that a new economic agent is created, and that the new economic agent is fully functional, are fulfilled.

Consequently, the joint venture shall be analysed under a “full functionality” criterion. Such functional autonomy has a normative (in the sense that the joint venture must act as a sovereign legal economic agent) and an economic dimension (in the sense that the joint venture has sufficient resources to operate in the market).

If the joint venture does not comply with the above conditions, it could be analysed under the general rules of the DL 211, referring to facts, acts or agreements that prevent, restrict or hinder competition (Article 3 of the DL 211).

For a review of how to calculate thresholds, see 2.5 Jurisdictional Thresholds.

The FNE can launch an investigation to analyse the effects of a transaction within a period of one year from the completion of a transaction that could have been voluntarily notified (Article 48 paragraph 9 of DL 211).

After the one-year period indicated in the law, the FNE cannot initiate an investigation pursuant to the provisions of Title IV of DL 211. Nonetheless, the FNE is always entitled to investigate any fact, conduct or agreement in accordance with the general provisions of competition infringements.

The parties must suspend the execution of the transaction until obtaining clearance from the FNE (Article 49 of DL 211).

If the parties contravene the duty to suspend the implementation of the transaction before clearance, they could be sanctioned under the provisions of Article 3 bis letter b of DL 211. In this case, any of the sanctions contemplated in Article 26 of DL 211 could be applied, and the FNE would have to follow the same mechanism described in 2.2 Failure to Notify.

These sanctions will be public, as they are determined by the TDLC (its procedures are public) and can be applied to all transactions that are notified and required to be notified in Chile, regardless of the geographic location of the parties involved in the transaction (see 2.5 Jurisdictional Thresholds and 2.8 Foreign-to-Foreign Transactions).

The only case in which the FNE has requested these sanctions to date was the Minerva/JBS merger where the procedure ended with a judicial agreement between the FNE and the parties. The parties agreed to pay a fine of USD1 million.

Both DL 211 and the FNE’s guidelines do not consider any exception to the suspensive effect. Also, there is no possibility to seek a waiver or derogation to this effect.

The failing firm defence can be used to modify the counterfactual that the FNE will use to conduct its substantive competition analysis, but not to authorise the materialisation of the transaction prior to its approval.

There are no circumstances in which implementation before clearance is permitted. In fact, in the JBS/Minerva case (see 2.14 Exceptions to Suspensive Effect), the parties materialised their operation abroad and carved-out the Chilean business, which was considered by the FNE as a breach of the obligation not to close.

There is no statutory deadline for the notification of a transaction before the FNE. The only relevant element in this analysis is that the transaction must be notified before its materialisation.

The FNE is competent to initiate a merger analysis procedure under Title IV of DL 211 as soon as there is a real and serious intention of the parties to carry out the operation.

This intention must be proven before the FNE by attaching a copy of the documents containing the willingness of the parties to carry out the operation and the terms of the agreements and negotiations established between the parties. The FNE also requires a written statement from the legal representatives of the parties indicating their intention to carry out the transaction.

Therefore, although in principle a letter of intent or memorandum of understanding cannot be excluded from those that would serve as proof before the FNE the real and serious intention to carry out a transaction, the fact is that these types of cases should be analysed in accordance with the specific circumstances of the transaction to determine whether they are sufficient enough to prove before the FNE the seriousness required to carry out the notification. Doubts in this matter could be resolved with the FNE through the pre-notification mechanism.

No filing fees are applied to the merger control regime in Chile.

The entities that are required to submit a notification are the those involved as parties in the legal act by virtue of which the concentration would be perfected, the "notifying parties" (Ordinary Notification Form, p.2). It may be the case that the "notifying parties" are different from those that require or offer services in the markets that will be affected by the transaction.

The notification must include, in accordance with DL 211, the information that is necessary in order to determine who the economic agents involved in the transaction are, as well as their economic group, what is the transaction about, and all the relevant information that may allow the authority to carry out a preliminary substantive analysis.

Regulation No 33 requires specific information regarding the markets involved, the economic agents and the foreseeable effects of the transaction including:

  • a description of the transaction and the ownership structure post-operation;
  • descriptions of the economic activities of the parties and of the entity subject to the operation;
  • definition of the relevant market(s);
  • market data; and
  • a description of the productive and/or dynamic efficiencies expected from the operation.

In addition, Regulation No 33 requires:

  • powers of attorney of the notifying parties;
  • a certificate signed by the legal representative of each party, identifying the company’s administrators;
  • corporate charts or diagrams of the notifying parties’ business group, prior and post operation;
  • annual reports, balance sheets and financial statements of the parties or of the entities of its business group which participate in the affected market(s), for the last three financial years;
  • any documents related to the operation and/or its effects in Chile, such as:
    1. ordinary and extraordinary board meeting memos and shareholders meeting memos of the parties or of the equivalent decision-making body held during the last three years;
    2. memos, presentations and/or internal or external reports prepared for the purpose of evaluating or examining the operation;
    3. analysis, studies, presentations and/or internal or external reports prepared for the purpose of evaluating or analysing the operation, or alternative concentration operations; and
    4. commercial programs and/or general business plans that have been issued, commissioned and/or discussed by the parties or the entities of its business group in the last three years for the affected market(s) in Chile;
  • databases, sources and criteria used by the parties to estimate market shares;
  • copies of studies, reports, analysis, surveys and any comparable documents prepared in the last three years to examine the affected market(s), conditions of competition, actual or potential competitors, consumer preferences, brand strength and potential growth or expansion for new products or geographic areas, among others;
  • list and copy of collaboration agreements, whether horizontal, vertical or otherwise, between the parties and/or between them and other players operating in the affected markets;
  • statements of the parties whereby they declare that:
    1. their intention is to, in good faith, materialise the notified operation; and
    2. the information provided is true, sufficient and complete, and that they understand the administrative and criminal sanctions that may be applied in case of providing false information or hiding information.

All these documents must be submitted in Spanish. However, the FNE may grant a special authorisation to submit certain information in English.

Notification must be signed by an attorney designated by the parties. In such case, a power of attorney must be submitted, which needs to be legalised.

Simplified Notification Procedure

Regulation No 33 from 2017 allows for a simplified notification procedure. This only implies that the parties are waived from the obligation to submit certain information, and therefore does not have any impact on the timeline of the analysis. A simplified notification can be made if:

  • there is no horizontal or vertical overlap between the parties or between the entities of their respective business group;
  • the market participation of the parties and of the entities belonging to their respective business groups are not capable of substantially reducing competition (participations of little significance are:
    1. joint market shares below 20%; and
    2. individual or joint market share below 30% in a relevant market vertically related to a relevant market in which any other party of the concentration, or any entity of their business group, operate); or
  • the following requirements are met:
    1. the joint market share of all the parties and the members of their respective business groups is lower than 50%; and
    2. the increase of the Herfindahl-Hirschman Index resulting from the operation is below 150 (this third hypothesis is not applicable to joint ventures).

If the parties do not provide all the background information required, and the FNE determines so by means of a resolution, they must supplement the notification. As long as the notification is not complete, the investigation will not be initiated and, therefore, the legal deadlines for the FNE to decide whether or not to approve the transaction will not start to run.

No sanctions as such are applied.

Article 3 bis letter e of DL 211 considers that providing false information is an infringement to competition law. In this case, any of the sanctions contemplated in Article 26 of DL 211 can be applied, and the FNE should follow the same mechanism described in 2.2 Failure to Notify; that is, the FNE must file a complaint before the TDLC who is going to decide on whether to apply or not a sanction.

In a case involving The Walt Disney Company (“Walt Disney”), the FNE filed a complaint against that company and TWDC Enterprise 18 Corp (TWDC), indicating that:

  • Walt Disney breached some commitments that were agreed upon during the investigation; and
  • TWCD provided false information and avoided submitting some documents required by Regulation No 33. The FNE and Walt Disney reached a judicial agreement that was approved by the TDLC.

In accordance with the agreement, Walt Disney agreed among other measures, to pay a fine of approximately EUR223,700. The trial continues against TWCD regarding the alleged infringement of providing false information and avoiding submitting some documents required by Regulation No 33.

The review process has two phases: Phase I and Phase II. The FNE will proceed to Phase II when it requires a deeper analysis of the transaction.

Firstly, the FNE has ten working days to assess whether the notification is complete (ie, if it contains all the information required by law). If it is not, the parties have ten working days to amend the filing. Once the parties file a new notification, the FNE can reassess its completeness. This iteration will be repeated until the FNE concludes the filing is complete. Once the filing is deemed complete, the investigation begins.

Hereafter, Phase I is initiated. It can only last 30 working days. If the FNE deems it necessary to review the transaction in greater depth, it will issue a resolution to initiate Phase II. This phase can take up to additional 90 working days. There is a possibility to extend those timelines:

  • upon agreement and for pre-fixed terms (up to 30 working days for Phase I and 60 working days for Phase II); or
  • each time the parties offer remedies to the FNE and for pre-fixed terms (up to ten working days for Phase I and 15 working days for Phase II).

The FNE cannot “stop-the clock” unilaterally.

Only as a reference, it is possible to mention that, in accordance with the FNE statistics, in 2020 the average time of the proceedings of transactions cleared unconditionally in Phase I was 22 working days; transactions cleared with remedies on Phase I was 54 working days, and transactions cleared on Phase II, took an additional 107 working days.

The merger control regime contemplates the possibility of initiating a pre-notification stage. Recently, in May 2021, the FNE issued the "Instructions on Pre-Notifications of Concentration Operations", by virtue of which certain rules were provided for the development of the pre-notification process. While the procedure maintains a rather informal character and is confidential, through these instructions, the FNE provided more certainty regarding the timing involved (previously there were no set deadlines for revisions of notifications and documents at the pre-notification stage).

The FNE always encourages parties to come forward at the pre-notification stage, as it understands that this can reduce the duration of investigations. Pre-notifications interactions, can also reduce the risk of the FNE declaring the lack of completeness of the filing (and the consequent delay on the initiation of the procedure).

It is common that, once the investigation has started, the FNE requests additional information from the parties or summons them to testify. This type of proceeding is also carried out with respect to third parties or authorities that may intervene or be relevant in the competition analysis, depending on the markets that are potentially affected by the transaction.

This type of injunction does not suspend the duration of the investigation; the only grounds for suspending the investigation period are those indicated in 3.8 Review Process.

There is no short-form, fast-track or other type of accelerated procedure for the review of transactions.

The substantive test applied is the “substantial lessening of competition” test. Only when a merger is deemed capable of substantially lessening competition will it be subject to remedies or blocked by FNE.

Neither the DL 211 nor the FNE’s Guidelines indicate how this test should be applied in practice.

There are no different tests applicable to specific sectors. It must be considered, however, that some specific sectors may require approval by other regulatory or supervisory agencies, but the analysis made by those authorities does not consider the competitive effects of the operation.

The parties must indicate in their notification which the relevant market(s) affected by the transaction is (are) and during its investigation, the FNE will conduct its own analysis to determine which relevant product(s) and geographic market(s) affected by the transaction is (are).

For this purpose, the FNE’s analysis will consider the most significant alternatives with which consumers from the merging entities can substitute their products (Horizontal Merger Guidelines, paragraphs 10–11). The FNE explicitly states that the merger analysis not always require a precise definition of the relevant markets involves (the Horizontal Merger Guidelines, paragraph 11 and the criteria confirmed in the Draft of New Horizontal Merger Guidelines, Section 12).

The Draft of New Horizontal Merger Guidelines

In the Draft of New Horizontal Merger Guidelines, the FNE also states that will prefer the more conservative approach and that in the case the transaction involves differentiated products, will examine anyway, the competitive proximity of the products (Sections 13–14 of the Draft New horizontal Merger Guidelines).

The Horizontal Merger Guidelines indicates as elements to develop de relevant market analysis (both, of the product and geographic) the following factors: process differences between products and the variation considering the location, product’s function, physical and technical characteristics of the product or service, time and cost of change, distribution channels, foreign competition authorities decisions, past experience of the market development, commercial decision of the merging parties, clients and competitors opinion, market studies, type of client and discrimination, quantitative tools (paragraphs 11–12 of the Draft New horizontal Merger Guidelines).

Now, in accordance with the Draft of New Horizontal Merger Guidelines the relevant the product relevant market analysis include substitution by reason of the products being sufficiently close in terms of characteristics, price and/or usage. The FNE will use the Hypothetical Monopolist Test to determine the extent of a market.

The elements to develop the product relevant analysis established in the Draft of New Horizontal Merger Guidelines include: definitions given by the parties, characteristic and use of the products, buyers and competitors’ behaviour, consumer’s changing time and costs, prices, cross elasticity, internal documents from the parties or third parties, consumers and competitors opinion, trade associations opinion, foreign competition authorities decisions (Section 18 of the Draft of New Horizontal Merger Guidelines). Also, the supply side of the market may be taken into consideration (Sections 20–21 of the Draft New horizontal Merger Guidelines).

Geographic Markets

Regarding the geographic perspective, the FNE will take into consideration: definitions given by the parties, physical characteristics of the products and the possibility to transport them, time and cost of transport, necessity of being close to consumers, products’ origin, prices, demand variations, historic relevance of imports, internal documents form the parties or third parties assessing the market, consumers and competitors opinion, and foreign competition authorities decisions (Sections 22–25 of the Draft New horizontal Merger Guidelines).

Other Markets

The FNE indicates in that other relevant factors for the analysis will be consumer or sales channel dimension of the market, time dimension, two-side markets, aftermarkets, and self-offer (Section 22 of the Draft New horizontal Merger Guidelines).

Digital Platforms

Also provided are some guidelines regarding digital platforms and digital markets, indicating that will distinguish between the different types of platforms: information, communication, intermediation of goods or services, supply chain and logistics, tasks platforms and fintech (Section 97 of the Draft New horizontal Merger Guidelines).

Risks to Competition

Under the current regulation, there are no concentration levels below in which it is estimated that there will be no major risks to competition. In spite of that, the FNE has pointed out that if, post-transaction, market concentration ratios do not exceed certain thresholds, it is very likely (but cannot be entirely ruled out) that the transaction will be deemed to have limited potential to substantially reduce competition. These thresholds are as follows (criteria included in the 2012 Horizontal Merger Guidelines, which has been maintained, to date, in the Draft of New Horizontal Merger Guidelines):

  • below an HHI of 1500;
  • above an HHI of 1500 and below an HHI of 2500 (an index expressive of a moderately concentrated market), with a projected change in HHI of less than 200; and
  • above a HHI of 2500 (index expressing a highly concentrated market), with a projected change in HHI of less than 100.

It is common for the FNE's and TDLC’s decisions to make references to foreign cases, mostly to those known and resolved by the Department of Justice and the Federal Trade Commission, in the United States, and by the Competition Commission of the European Union along with cases resolved by national competition authorities in Europe, such as Spain, France, Germany or the United Kingdom. With that being said, the FNE and the TDLC are always careful to take into consideration the specific characteristics of the Chilean market.

The FNE will examine the different risk theories traditionally considered by the European and US competition authorities, depending on the type of transaction (horizontal, vertical or conglomerate). Specifically, the FNE will investigate:

  • unilateral risks;
  • co-ordinated risks;
  • conglomerate or portfolio risks;
  • vertical risks; and
  • risks arising from the elimination of potential competition.

The FNE considers economic efficiencies in its analysis. Regulation No 33 expressly states that the parties must include a description of these efficiencies in their notification filing, quantifying them and justifying the time frame in which they will be realised, for them to be examined by the FNE (Article 2 No 11 and Article 7 No 10, Regulation No 33).

The FNE notes that both productive efficiencies (eg, synergies, economies of scale, economies of scope and economies of density) and dynamic efficiencies will be considered.

To be considered in the analysis, efficiencies must be verifiable, inherent to the transaction and capable of offsetting the increased market power obtained by the merged entity.

Normally, efficiencies, within the substantive analysis, are considered as a counterbalance to the competition risks identified in relation to the transaction (this has been pointed out by the FNE both in Horizontal Merger Guidelines from 2012 and the Draft of New Horizontal Merger Guidelines).

The FNE carries out an analysis exclusively from a competition point of view. Other considerations, such as national security, foreign investment, employment or other matters of general interest are not part of the analysis. The DL 211 is also clear in limiting the FNE's power when overseeing competition law matters.

There are no special legal rules of substantive analysis for joint ventures; the same rules and criteria in 4.1 Substantive Test to 4.5 Economic Efficiencies apply to those.

However, in the Draft of New Horizontal Merger Guidelines (still under public consultation), for the first time, specific provisions are established with respect to joint ventures (Sections 81-84 of the Draft of New Horizontal Merger Guidelines). In the new Guidelines, the FNE stated that it will emphasise the analysis regarding coordinated risks, because joint ventures strengthen links between economic agents and that may facilitate coordination among them both in the market where the joint venture will operate as in other markets where the companies have presence. Besides, the FNE indicated that when a parent company of the joint venture operates in the same market as that of the joint venture it will carefully examine the unilateral risks and how the merger affects the incentives to operate of the parties.

In the case of notifications (whether voluntary or mandatory), the FNE has the power to:

  • approve the transaction;
  • approve the transaction subject to the remedies offered by the parties; or
  • block the transaction on the grounds that it has the ability to substantially lessen competition.

The decision to block a transaction must be established in a reasoned finding issued by the FNE. A redacted version of this finding will be published on its website.

If the FNE blocks the transaction, the parties may request an appeal before the TDLC to challenge the decision (special appeal). If the parties do not file such an appeal, the FNE's decision to block the transaction will be legally binding for them and they will not be able to implement such transaction. Since the Chilean merger control regime came into force (June 2017), three transactions have been blocked by the FNE; in just one case have the parties filed a special appeal before the TDLC (the transaction was finally approved subject to remedies offered by the parties), and for the other two, the deal was frustrated.

If the parties implement a transaction that has been blocked by the FNE, they may be sanctioned under Article 3 bis letter d of DL 211. In this case, the same sanctions and procedure as described in 2.2 Failure to Notify may apply.

If the FNE identifies competition risks in relation to the transaction, it will normally communicate them to the parties at the end of Phase I in a special meeting. After such a meeting, the parties may offer remedies to the FNE to mitigate the identified risks.

The possibility to offer remedies is a right for the parties, in addition to the right to be heard during the investigation (Article 53 paragraphs 2 and 3 of DL 211).

Each submission of remedies suspends the investigation period for ten days in Phase 1 and 15 days in Phase 2 (see 3.8 Review Process); during this suspension, the parties and the FNE negotiate the remedies. Typically, more than one possible remedy is proposed until one is finally accepted by the FNE. This includes structural, quasi-structural and behavioural remedies (see 5.4 Typical Remedies).

DL 211 states that remedies must be appropriate to mitigate the competition risks identified in relation to the notified transaction.

The FNE’s Guidelines on Remedies specifies the requirements that remedies must meet requirements in order to be accepted.

  • First, remedies must be effective in preventing the concentration from the ability of substantially lessening competition, throughout the expected duration of the concentration (Sections 8–9 of the Remedies Guidelines).
  • Second, remedies must be feasible to implement, enforce and monitor. Thus, for example, the existence of potential buyers or the possibility of selling an economic unit without losing its value will be analysed (Sections 10–11 of the Remedies Guidelines).
  • Third, remedies must be proportionate to the identified competition risks (Section 13 of the Remedies Guidelines).

General Remedies

In general, two categories of remedies are considered in the FNE’s Guidelines on Remedies, which are used depending on a case-by-case analysis.

Firstly, structural remedies. These remedies tend to be of two kinds: those that involve the sale of assets to a suitable buyer (to create a new entity or consolidate the incumbent competitors), and those that are intended to remove links between competitors (for instance, to mitigate co-ordinated risks generated by the transaction).

Secondly, remedies that do not involve a divestment but imply a limitation or modification of the future behaviour of the economic agents involved in the transaction. These remedies include:

  • quasi-structural measures intended to influence the market structure affected by the operation (such as access and licensing obligations);
  • behavioural remedies (such as prohibitions on entering into agreements containing exclusivity clauses, arbitrary discriminations, tied sales, bundling, conditional sales, among others);
  • obligations to limit access to information within certain business groups (“Ethical Walls”);
  • remedies that promote the regulation of market power; and
  • behavioural obligations in relation to the purchaser of the divestiture package.

Horizontal Mergers

The FNE also has stated that in case of horizontal mergers, as a general rule, a divestiture remedy will be preferred. However, that does not prevent the FNE from the adoption of other complementary remedies. In this case, the divestiture should consider a suitable buyer, which, in general terms, must be able to restore the competitive rivalry lost as a result of the transaction. In this sense, the FNE will evaluate if the purchaser proposed by the parties has the expertise, experience, assets and sufficient financial resources to operate for the long term in the market. In addition, it must be independent from the parties.

The authority may require an up-front buyer when it seems likely that subsequent implementation will compromise the viability of the measure (for example, if there is no certainty about the existence of suitable buyers for the divested package).

Other Risks

In case of risks associated to vertical or conglomerate merges, the FNE will be more willing to consider remedies different to the divestiture to a suitable buyer. However, even in relation to this type of mergers, the FNE may prefer divestitures remedies when proportional to the identified risks.

As a general rule, the FNE focuses its analysis on competition and does not require remedies to mitigate risks other than the ones identified within the competition analysis.

Only the parties may offer remedies to the FNE at any stage of the investigation (either Phase I or Phase II). However, considering that remedies will mitigate the competition risks identified in connection with the transaction, they will normally be offered by the parties after the FNE communicates those risks to them (normally at the end of Phase I). At that point, a negotiation period with the FNE begins, which is not legally regulated. During this period the FNE will analyse the offer and could require some adjustments to the initial proposal. This interaction is repeated until the final design of the remedies is reached by the parties and the FNE, which can occur during both Phase I and Phase II of the investigation.

Remedies will be accepted during Phase I only if competition risks are readily identifiable and remedies are sufficiently comprehensive and clear in addressing all potential competition concerns raised by the transaction (Section 21 of the Remedies Guidelines).

In terms of procedure, remedies must be offered in writing, detailing the way in which they are intended to be implemented and the deadlines for doing so. The FNE may request the opinion from third parties on the suitability of the remedies offered to revert the risks identified, and on the potential problems that the implementation of remedies could imply (Article 53, final paragraph of DL 211).

Finally, it may be the case that having the parties filed the special appeal (see 1.3 Enforcement Authorities, 5.1 Authorities' Ability to Prohibit or Interfere with Transactions and 8.1 Access to Appeal and Judicial Review), the TDLC imposes remedies other than those offered by the parties. This is the only case in which an authority could impose remedies not agreed upon by the parties. In this scenario, the parties may request a further review by the Supreme Court.

Remedies can be offered by the parties within the notification filing or during the notification process (Sections 16 and 22 of the Remedies Guidelines). When offering remedies, the parties are required to indicate how they will implement them and their timeline (Section 17 of the Remedies Guidelines). The parties must also identify the compliance supervisor and the trustee(s) who will be overseeing the process, and the functions to be performed by them.

The FNE and the merging parties negotiate the remedies as well as the timing to execute them. Therefore, the possibility to complete a transaction before the remedies are complied with, will depend on the type of remedy and the negotiation with the FNE during the notification process (Sections 27–28 of the Remedies Guidelines).

Mergers Cleared with Mitigations

Where a merger is cleared with mitigations that include a divestiture, but the identity of the buyer was not established during the notification process, the parties will have to submit a proposal, obtaining an approval resolution from the FNE and execute the divestment, within nine months. The parties must obtain the approval resolution within six months from the clearance of the merger. In the event the parties do not obtain the approval (because they did not make a proposal, or the proposals were rejected) the assets or business to be transferred shall be forcibly disposed by the divestiture supervisor appointed for this purpose in the letter of measures (Section 68 of the Remedies Guidelines). The forced transfer will not have a minimum price (Section 70 of the Remedies Guidelines).

Regarding mitigations different form divestitures, the FNE indicated in the Remedies Guidelines that the measures should remain in effect for the same amount of time as the risk(s) that they are aimed to mitigate (Section 76 of the Remedies Guidelines).


If the remedies are not complied with, the parties are subject to the same sanctions that in the case of general infringements to competition law (see 2.2 Failure to Notify). The FNE must my file a complaint before the TDLC, and the TDLC will establish whether there was a breach regarding the remedies and impose the corresponding sanction, if appropriate.

The decision to clear or block a transaction is always in writing, contains the grounds for the decision and is published by the FNE on its website.

In foreign-to-foreign transactions, the FNE takes into consideration the remedies that have been presented in other jurisdictions, particularly in the United States and European Union countries. This is because, given the characteristics of the Chilean economy, measures implemented in those jurisdictions are also relevant for the purposes of the analysis in the Chilean market and potentially to address competition concerns identified in Chile (see the Dow/Dupont case and the Bayer/Monsanto case).

Other cases of foreign-to-foreign transactions where the FNE has required remedies have been AT&/Time, eg, the Warner case, the Disney/Fox case and the Linde/Praxair case.

DL 211 is silent on whether an approval decision would cover related ancillary restraints. However, it can be assumed that an approval decision covers this type of arrangements, without the FNE or TDLC having to assess such restrictions separately or expressly. On the contrary, for restrictions that cannot be regarded as directly related and necessary for the transaction, general competition rules contained in the DL 211 will remain applicable.

Regulation No 33 also requires the parties to specify whether there are agreements “related” to the transaction that may restrict competition (ie, non-competition clauses, exclusivity clauses, among others; see Article 2 No 4 letter d and Article 7 No 4 letter c of Regulation No 33).

Third parties (eg, customers, competitors, sectoral authorities) can submit a written presentation regarding the effects and other concerns related to the transaction. Normally, these submissions are received at the beginning of Phase II, when the FNE publishes the decision that initiates this stage and, by law, must allow a period of 20 working days for third parties to submit background information for the investigation (Article 55, paragraph 2 of DL 211).

Additionally, but no longer a right of third parties, but as part of the exercise of its powers, the FNE may request information from any third party or relevant authority and may summon them for a deposition (see 7.2 Contacting Third Parties).

The FNE contacts third parties and normally requires information or summons them to testify in the exercise of its investigative powers (Article 52, in relation to Article 39, letters f, g, h, j, k, l and m of DL 211). Third parties are obligated to provide the information requested or to testify, and there are sanctions for failure to comply with the FNE's requests (fines and imprisonment, Article 39 letters h and j of DL 211). Depending on the type of request sent by the FNE, the contributions to the investigation will be written or oral. During the COVID-19 pandemic, some proceedings have been conducted virtually.

In the case of a market test regarding the remedies offered by the parties, DL 211 authorises the FNE to make them known to third parties in order to know their opinion (Article 53, final paragraph, of DL 211). This market testing may take the form of written questionnaires, meetings or formal depositions. If necessary, it is possible to prepare redacted versions of the remedies to safeguard confidentiality when market-testing them.

There is no public announcement that a notification has been filed. However, the resolution initiating the FNE’s investigation as well as the FNE’s final decision is published on its website. In both cases, redacted versions are published in order to protect the confidentiality of the information.

Generally, all information submitted with the notification or during the investigation, whether by the parties or third parties, is kept confidential. If necessary, redacted versions of the information or pieces of information that form part of the file are prepared.

The file during Phase I is confidential. If the investigation is extended to Phase II, DL 211 requires the preparation of a public version of the file for consultation by any third party. In this case, the owners of the information are always required to prepare redacted versions of the information provided.

The FNE has signed various co-operation agreements with other competition agencies (Brazil, Canada, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Peru, Spain and the United States). These agreements provide for technical assistance, and some of them also have provisions regarding co-operation and information exchanges for enforcement.

In order to share confidential information with authorities in other jurisdictions, the FNE will request a waiver from the notifying parties (a template is available on the FNE’s website). The experience is that the parties generally provide a waiver, although there are no formal sanctions on a denial.

The parties may bring a special appeal before the TDLC (see 1.3 Enforcement Authorities and 5.1 Authorities’ Ability to Prohibit or Interfere with Transactions), which is only available if the FNE blocks the transaction. An appeal has to be made within ten working days after the decision is issued by the FNE.

The TDLC will request that the FNE submit the investigation file and must schedule a hearing within 60 judicial days (Monday to Saturday), after receiving the FNE’s file. The parties, the FNE and those who have provided information in Phase II may participate from the public hearing. A decision must be rendered by the TDLC within 60 judicial days following the oral hearing.

The TDLC’s decision is not subject to further judicial review, unless the TDLC approves the transaction imposing new remedies, different than the ones previously offered by the parties. In such case, both the parties and the FNE may file an appeal before the Supreme Court.

Since the new merger control regime came into force in June 2017, there has only been one case in which the parties filed a special appeal (see the Ideal/Nutrabien case), and it was successful. Therefore, there is not much information that would allow to account for the typical overall duration of this procedure. In the Ideal/Nutrabien case, six and a half months elapsed from the filing of the appeal until the final decision (there was no intervention of the Supreme Court; otherwise, the duration would have been longer, although it is not possible to say how long since this appeal has not been filed to date).

Only the parties of a merger can file a special appeal for review before the TLDC; third parties cannot file any appeal against a decision approving a merger.

Recently, a Chilean consumer association filed a request for reconsideration before the FNE (which is different from an appeal and is regulated in the administrative rules) in relation to a decision to clear a merger. In May 2021, the FNE rejected the request for reconsideration made by this third party, confirming its decision (CGE/State Grid case).

During 2019, the FNE opened a public consultation process regarding Regulation No 33, which details the information that must be submitted with the notification. To date, a new version of the regulation has not yet been published but it is expected that a new text will be released soon, which will most likely simplify, limit or reduce the amount of information required to be submitted with the notification.

In August 2019, the new version of the Thresholds Guidance was published (the previous one was from June 2017).

In May 2021, the FNE opened a consultation process regarding the Draft of New Horizontal Merger Guidelines, which determine the substantive criteria to be applied to the analysis of horizontal mergers and which will replace the old guidelines of October 2012. This consultation process is still ongoing and the FNE is likely to publish the final version during the second half of 2021 or first half of 2022.

Finally, also in May 2021, the FNE published the Instructions on Pre-Notifications of Concentration Operations, which sets out a procedure in writing that until now was applied in practice by the FNE. Among the main provisions is the one in which the FNE defines a timeline, limiting a first review to a maximum of 15 working days, without prejudice to subsequent reviews and interactions arising from the first analysis of the consultation formulated by the parties.

In 2018, the FNE filed a complaint before the TDLC against two companies for infringing the standstill obligation (see 2.15 Circumstances Where Implementation before Clearance is Permitted).

In 2020, the FNE filed another injunction against the parties involved in a transaction for failing to comply with the remedies approved by the FNE and, in addition, for providing false information during the investigation (Article 3 bis, letters c and d of DL 211; see 3.7 Penalties/Consequences of Inaccurate or Misleading Information).

From June 2017 to March 2021, three transactions have been blocked by the FNE (the TDLC ended up clearing one of them), 131 transactions have been unconditionally cleared and 13 transactions have been cleared subject to remedies.

No specific trends are observed. However, the explicit recognition in the Draft of New Horizontal Merger Guidelines of dynamic and innovation markets, and digital platforms and digital markets is noteworthy as a sign that the FNE is adopting more contemporary approaches and is in line with what other competition authorities have done (ie, United States and the European Union). This is relevant as until now there was no express explanation of how the FNE would approach transactions in these types of markets.


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FerradaNehme is a well-known multidisciplinary law firm, located in Chile, focused on corporations, companies, institutions, and individuals. FerradaNehme’s practice areas are competition, corporate and M&A, public law, environment and natural resources, telecommunications and media, complex litigation, consumer law, compliance and technologies. FerradaNehme’s competition practice is one of the largest in Chile and the first in the country completely dedicated to this matter. This area is comprised of 20 lawyers and one economist, who are specialised in antitrust litigation, administrative procedures, compliance, mergers, acquisitions, and joint ventures, among others. As one of the most interdisciplinary practices in the law field, the aforementioned specialisations are related to, and also complement, other areas, with compliance, economic regulation and complex litigation being the most common.