Morocco has enacted amendments to its competition law that will have significant impacts on its merger control regime. The amendments include increasing the minimum turnover thresholds for merger control filings, introducing a simplified filing form for no-issue transactions, and requiring a filing fee, with an optional expedited process for an additional fee.
The Moroccan Competition Council ("MCC") oversees the country's antitrust regime, which is governed by two laws and corresponding implementing decrees initially enacted in 2014.1 On June 1, 2023, the MCC announced amendments to these decrees that modify certain merger control provisions and introduce new ones ("Amendments").2 The Amendments were published in Morocco's Official Gazette dated May 23, 2023 and came into force the following day. We provide here a brief overview of the key changes.3
Higher Filing Thresholds
The Amendments increase the turnover thresholds that trigger a filing requirement in Morocco for parties intending to participate in a transaction constituting an "Economic Concentration."4 Under the new thresholds, parties must notify the MCC and obtain merger clearance before completing a transaction if:
(i) The combined turnover of the parties worldwide exceeds MAD 1.2 billion (approx. USD 120 million), and the turnover in Morocco of at least one party is greater than MAD 50 million (approx. USD 5 million);
(ii) The combined turnover of the parties in Morocco exceeds MAD 400 million (approx. USD 40 million), and the turnover in Morocco of at least two parties is greater than MAD 50 million (approx. USD 5 million); or
(iii) The parties have a combined market share of more than 40% in Morocco.5
The higher thresholds should reduce the number of filings for transactions with no effect in Morocco, which is a welcome development that would help ease unnecessary burdens on both the MCC and businesses alike. However, given that the first and third thresholds could potentially be triggered by one party's turnover or market share alone, a number of global businesses that are active in Morocco could technically trigger a filing requirement for each Economic Concentration they enter anywhere in the world, even when the transaction has no nexus to Morocco. It remains to be seen how the MCC will apply this threshold in practice and whether it will consider lack of local effects exemptions.
Simplified Filing Form
The Amendments introduce new simplified filing requirements for transactions that do not raise any competitive concerns. The simplified filing form will require less information and documents in the initial submission, as compared to the requirements under the older form. Under the simplified filing requirements, parties must provide basic information on the transaction and its objectives, financial information for the past three years, company accounts and annual reports, a list of the parties' major shareholders, other transactions carried out in the last three years, and descriptions of the parties' activities and relationships in the relevant market.6
If the MCC finds that the transaction could affect competition in the relevant market in Morocco, the parties will be required to submit a longer filing with more information and documents. The more detailed filing would apply the same requirements of the original filing form of the 2014 Decrees—prior to the recent Amendments.7
Filing Fees / Expedited Review
While filing fee payments were previously not required for merger control filings in Morocco, the recent Amendments changed that. The Amendments establish a filing fee equal to 0.1% of the transaction's value, with a minimum filing fee of MAD 20,000 (approx. USD 2,000) and a maximum of MAD 150,000 (approx. USD 15,000).8 If parties do not furnish a transaction's value to the MCC, the maximum filing fee will apply.9 The filing fee must be paid within a month of the MCC's decision, even if the parties ultimately abandon the transaction. Yet, no filing fee is due if the MCC decides that the transaction was not notifiable.
Additionally, parties can now request expedited review of their merger control filings for a higher filing fee. The Amendments provide that parties may submit a "reasoned request" for expedited review to the MCC, but there is no guidance on what information should be included in such request or criteria the MCC will consider in evaluating these requests yet.10 If the MCC approves a request for expedited review, the parties must pay doubled filing fees—up to a maximum amount of MAD 300,000 (approx. USD 30,000).11
Increased Antitrust and Merger Control Enforcement
The Amendments follow increased enforcement activities by the MCC in both merger control and antitrust investigations. In April 2022, the MCC issued its first ever gun-jumping fine against Swiss specialty chemical company Sika AG for failure to notify the MCC before its acquisition of French Company Financière Dry Mix Solutions.12 The White & Case Global Antitrust Merger StatPak (WAMS) also reveals that merger notification filings in Morocco have more than doubled in the last three years, from 62 notifications in 2020 to 133 in 2022.
In addition, the MCC issued various penalties exceeding MAD 70 million (approx. USD 7 million) during the last year.13 Just this month, the MCC reinitiated an investigation into potentially predatory and anti-competitive practices in Morocco's fuel distribution market.14
These developments come on the heels of increased antitrust legislative and enforcement activity across the Middle East & North Africa. Indeed, in just the last year, Egypt transformed from a post-closing notification regime to a pre-merger approval regime,15 Saudi Arabia's General Authority for Competition increased its merger control notification thresholds and blocked two deals,16 the Kuwaiti Competition Protection Agency issued its first fine against an unnamed steel company for failure to provide required information,17 and new competition laws and regulations are being considered in Jordan, Lebanon, and Libya, among others.18
Moreover, the Arab Competition Network, launched in March 2022 to coordinate collaboration among the competition authorities of 17 Arab countries, held its second annual meeting this March, and it was held in Morocco. The MCC also heads the Network's merger control working group, which aims to streamline regulations across the region and bolster enforcement efforts.19
Conclusion
The Amendments to Morocco's merger control regulations are a welcome development for the MCC and for companies conducting business in Morocco. The changes aim to reduce the number of unnecessary merger filings, simplify filing requirements, and introduce procedures to help increase efficiency and expedite the merger clearance process for certain transactions. Given the recent track record of increased antitrust enforcement in Morocco and heightened collaboration among competition authorities of the Middle East and North Africa, it is likely the MCC will actively enforce the new merger control regime. Parties in qualifying transactions are advised to consider carefully their potential filing obligations in Morocco to avoid steep fines for failure to comply.
1 See Law No. 104.12 relating to the freedom of prices and competition and its implementing regulations in Decree No. 2.14.652; and Law No. 20.13 relating to the Competition Council and its implementing regulations in Decree No. 2.15.109.
2 Morocco Competition Council, Press Communication (June 1, 2023), available in Arabic at this link: Communique-en-arabe.pdf (conseil-concurrence.ma) (announcing the adoption of Decree No. 2.23.273, amending and supplementing Decree No. 2.14.652; and Decree No. 2.23.274 amending and supplementing Decree No. 2.15.109).
3 The authors are grateful for the support and contributions of Nazly Khedr, Fatima Jamal, and Youssef Abdelmaksoud to this article.
4 Article 11 of Law No. 104.12 defines Economic Concentrations as: (i) any merger of two or more previously independent companies; (ii) one or more persons already holding control of at least one company acquiring, directly or indirectly, control of all or part of one or more companies; or (iii) one or more companies acquiring, directly or indirectly, the control of all or part of another company or all or parts of several other companies, which includes the creation of a JV performing on a long-term basis all the functions of an autonomous economic entity.
5 See Decree No. 2.23.273, Article 1 (amending Article 8).
6 See Decree No. 2.23.273, Appendix 2, (1)-(2).
7 See Decree No. 2.14.652, Appendix, (1)-(5).
8 See Decree No. 2.23.273, Appendix 1, Article 2 (supplementing Article 8 bis.).
9 See Decree No. 2.23.273, Appendix 1, Article 2 (supplementing Article 8 bis.).
10 Id.
11 Id.
12 See Moroccan Competition Council, Press Communication, "Communication on non-respect of the obligation to notify the Competition Council of an economic concentration involving the acquisition of Sika AG into exclusive control by Financière Dry Mix Solutions" (May 3, 2022), available in Arabic at this link: Communique-04-05-2022-en arabe.pdf (conseil-concurrence.ma).
13 Yunus Al-Zuhair, Raho: The Competition Council Penalized Companies More than 70 Million Dirhams Within One Year, THE DEPTH (June 9, 2023), available in Arabic at this link: https://al3omk.com/849185.html.
14 Sara Zouiten, Morocco's Competition Council Reopens Investigation into Fuel Distribution Case, MOROCCO WORLD NEWS (June 2, 2023), https://www.moroccoworldnews.com/2023/06/355761/moroccos-competition-council-reopens-investigation-into-fuel-distribution-case.
15 See White & Case Client Alert: "Egypt to Overhaul its Merger Control Regime" | White & Case LLP (whitecase.com) (Dec. 8, 2022).
16 See White & Case Client Alert: "Saudi Arabia's General Authority for Competition Increases its Merger Control Notification Thresholds" | White & Case LLP (whitecase.com) (Apr. 5, 2023).
17 See White & Case Client Alert: "New Competition Regimes and Increased Antitrust Enforcement across the Middle East & North Africa" | White & Case LLP (whitecase.com) (Jan. 27, 2023).
18 Id.
19 See Egyptian Competition Authority, Press Release, "Egyptian Competition Authority hosts meetings of the working groups on ‘Institutional Efficiency' and 'Enforcement of Competition Laws' of the Arab Competition Network," (Nov. 2022), available in Arabic at the following link: إصدارات إعلامية (eca.org.eg).
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