Staff Reporter
THE Namibia Competition Commission (NaCC) held a stakeholder engagement at which it announced its intention to raise the threshold for mandatory merger notifications from N$30 million to a combined total of N$60 million.
Taimi Amunkete, senior researcher in the Economics and Sector Research Division, explained that it is essential to determine the appropriate cut-off for the size of undertakings.
She added that when merger notification thresholds are too high, transactions with an impact on competition may go unchecked and have the potential to have detrimental effects on the market, whilst lower thresholds create an unnecessary administrative burden on competition authorities and merging parties.
Amunkete said that jurisdictions charge filing fees for several reasons, including to cover the cost of the merger review process, and that current thresholds have not been revised since 2017 and may be non-responsive to market developments, including inflation.
Also speaking at the consultative meeting, the Chief Executive Officer of the NaCC said that the review of mergers and acquisitions is one of the Commission’s central statutory responsibilities.
“It enables the Commission to assess whether proposed transactions are likely to substantially prevent or lessen competition or otherwise negatively affect the public interest, while also allowing transactions that do not raise material competition concerns to proceed. An effective merger-control regime must, however, remain responsive to developments in the economy. Notification thresholds must be appropriately set to enable the Commission to focus its attention and resources on transactions that are more likely to have a meaningful effect on competition and the public interest. At the same time, the framework should avoid imposing unnecessary notification requirements and associated costs on transactions that are unlikely to raise significant concerns,” Vitalis Ndalikokule said.
He added that, similarly, filing fees must be reasonable, transparent and proportionate.
“They should support the effective administration of the merger-review process without creating an unjustified burden on businesses or discouraging legitimate economic activity and investment. It was against this background that the Commission undertook a comprehensive review of the merger notification thresholds and filing-fee framework. The objective was to ensure that the framework remains proportionate, administratively efficient and responsive to present economic conditions,” Ndalikokule said.
He added that the details of the study, including the data, scenarios and methodology considered, will be presented later in the programme.
“At this stage, I only wish to emphasise that the revisions are grounded in evidence, institutional experience and the need to support a more effective merger-control system. Following consideration of the study and its recommendations, the Commission approved revisions to the merger notification thresholds and filing-fee structure. Today’s engagement is therefore intended to formally introduce those revisions, explain the evidence and reasoning underpinning them and provide stakeholders with practical clarity on what the revised framework will mean. Further to this, the purpose of today’s engagement is to present stakeholders with the opportunity to seek clarification and make inputs,” Ndalikokule said.
Photo: NaCC
