Amendments to Review Times and Procedure in the Moroccan Merger Control Regime

The most recent amendments of the Moroccan merger control regime, which entered into force in May 2023, introduces new turnover notification thresholds as well as several procedural novelties. For an overview of the amended notification thresholds see our client update of September. Aside from the amendments to the thresholds, the reform saw the introduction of a notification fee, the possibility to submit a simplified notification form, and an expedited review process. Furthermore, the Moroccan Competition Council launched a case law database that enables access to European competition law decisions by judges and case handlers.

Since the Competition Council became operational again in 2018, there has been a considerable uptake in merger control reviews. In 2019 the Competition Counsel issued 53 merger control decisions. The number of reviews more than doubled over the next two years and the Competition Counsel reviewed 121 transactions in 2021. In May 2022, the Competition Council imposed its first gun-jumping fine in a foreign-to-foreign transaction on the Sika AG in respect to their acquisition of sole control over Financière Dry Mix Solutions SAS.

Review Period

In phase 1 the Competition Council must issue their decision within 60 days of receipt of the complete notification file. If commitments are offered by the parties, the review period is extended by 20 days. Furthermore, the Competition Council may extend the review period in phase 1 by an additional 20 days. Where the Competition Council proposes to clear the transaction in phase 1, the government may within 20 days of having received the decision instruct the Competition Council to initiate a phase 2 review. If no decision is issued within the review time and the government does not propose phase 2 review in the time allotted, the transaction is deemed cleared.

In phase 2 the review period is 90 days. Where the parties offer commitments less than 30 days before the end of the 90 days review period, the review period will expire 30 days after receipt of the commitments. The 90 days review period may be suspended for up to 30 days if the parties request so for valid reasons, such as the parties needing time to finalize proposals for commitments. The government may within 30 days of receiving the Competition Council’s decision, may exert their power and issue a decision on the transaction for reasons of public interest. If no decision is issued by the Competition Council and the government within the respective review periods, the transaction is deemed cleared.

The Competition Council may in both phase 1 and phase 2 suspend the review periods, in particular where the parties fail to respond to RFIs or inform the Competition Council of material changes to the transaction in due time.

Expedited Review

The reforms introduced an expedited merger control review. The amended regulations provide that parties may submit a ‘reasoned request’ for expedited review to the Competition Council. So far there are no guidance on when an expedited review may be applied and what information should be included in a request for expedited review.

‍Filing Fee

Prior to the May 2023 amendments no filing fee was due. Under the amended regulations a filing fee of 1 percent of the transaction value, but no less than MAD 20,000 (approx. USD 2,000) and no more than MAD 150,000 (approx. USD 15,000), must be paid. The cap is doubled in expedited review. The filing fee must be paid within one month of the Competition Council’s decision, even if the parties abandon the transaction.

Sanctions

The principle sanction under the merger control regime are fines. Legal entities may be fined with up to 5 percent of their Moroccan pre tax turnover achieved during the previous full financial year. Both acquirer and target may be fined. Individuals may be fined with up to MAD 5 million (approx. USD 500,000). In addition to one off fines the Competition Council may compel the parties to make a filing after the fact and impose daily fines until the filing is submitted.

Cooperation with other jurisdictions

The Competition Council entered into cooperation agreements with several foreign authorities. Under the Euro–Mediterranean Agreement and Decision No 1/2004 of the EU–Morocco Association Council of 19 April 2004 a mechanism for cooperation between the Competition Council and European competition authorities. In 2020, the Competition Council announced a new partnership with the European Union to harmonise of competition matters. The Competition Council is also a founding member of the Euro–Mediterranean Competition Forum, an informal regional network set up in 2012. The Competition Council also concluded cooperation arrangements with the Spanish, Chinese, Turkish, Greek, and Libyan competition authorities. Moreover, the Competition Council announced negotiations with the Tunisian, Portuguese, and Chilean competition authorities and joint the Arab Competition Network.