The New Moroccan Merger Control Regime: One Year

Morocco has historically been inactive in antitrust and merger control enforcement. Although the Moroccan Competition Law (Law No. 104-12) and its implementing decree were introduced in 2014, the regime remained largely dormant until the Competition Council became active in 2022. Notable developments, including the introduction of new notification thresholds in May 2023 (Decree No. 2-23-273) and guidelines issued in December 2023, have shaped Morocco’s merger control landscape, introducing a local effects test and enhanced procedural options.

Notification Thresholds

Under the May 2023 amendments, transactions require notification if they meet any of the following thresholds:

• International turnover threshold: Parties have a combined worldwide turnover of at least MAD 1.2 billion (USD 118 million), with one party having a Moroccan turnover of at least MAD 50 million (USD 4.8 million).
• Domestic turnover threshold: At least two parties have a combined Moroccan turnover of MAD 400 million (USD 39 million), with each having a Moroccan turnover of at least MAD 50 million (USD 4.8 million).
• Market share threshold: The transaction results in an entity holding at least 40% market share in Morocco.

Local Nexus Test

The December 2023 guidelines introduced a local nexus test, requiring notification only if the target has a connection to Morocco, even if Moroccan turnover thresholds are not met. A connection can be established through:

• Revenue below MAD 50 million,
• Moroccan assets or subsidiaries,
• Procurement from Morocco,
• Horizontal or vertical links with Moroccan activities, or
• Registered trademarks or patents in Morocco.

Two key decisions illustrate the application of this test:

The Kohler-Platinum Equity case (December 2023) required notification due to the target’s operations in Morocco.

The Smulders-Meyer Neptun joint venture case (January 2024) did not require notification, as the joint venture lacked Moroccan market plans or relevant relationships.

Simplified and Expedited Procedures

The guidelines introduced two review tracks:

Simplified Procedure: For low-competition-risk transactions, such as acquisitions of sole control from joint control. Applications must include transaction details and expected impacts.

Expedited Procedure: Open to any transaction, regardless of competition concerns, with faster review times but doubled filing fees capped at MAD 300,000 (USD 30,000). Both tracks allow reversion to standard review if needed.

Penalties

Amendments increased penalties for non-compliance. Entities may face fines up to 5% of their Moroccan pre-tax turnover, with individuals fined up to MAD 5 million (USD 500,000). Daily fines may also be imposed until a filing is submitted. Both acquirers and targets can be penalized.

Increased Enforcement Activity

The Competition Council’s fine against Sika AG in 2022 spurred greater compliance, particularly among foreign-to-foreign transactions. Notifications have increased, fueled by stricter enforcement and retrospective scrutiny of past transactions. While leniency has been shown in non-competitive cases, stricter enforcement is expected moving forward.

Conclusion

The Moroccan Competition Council’s enhanced merger control regime, supported by clearer guidelines and increased penalties, signals a shift toward greater enforcement. Businesses operating in Morocco must navigate the evolving requirements carefully to avoid penalties and ensure compliance.

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