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A reform of the Moroccan merger control rules was launched in 2014 with the adoption of Law No. 104-12 of 30 June 20142 on free pricing and competition and its Enforcement Decree No. 2-14-652 of 1 December 2014, and Law No. 20-13, relating to the Competition Council of 30 June 20143 and its Enforcement Decree No. 2-15-109 of 4 June 2015, which transferred the merger control function to the Moroccan Competition Council, which previously only had a consultative role for the Chief of Government. Under this new legal framework, only residual powers are retained by the Chief of Government (in particular, an evocation power on the decisions of the Competition Council for matters of public interest).
However, the provisions of this new legal framework have only been applicable since December 2018, when the new president and members of the Competition Council were appointed; the Competition Council was not operational between 2014 and 2018.
Under the Moroccan merger control regime, a concentration occurs where:
De facto concentrations are also covered by the merger control regime.
The creation of a joint venture performing all the functions of an economic entity on a lasting basis shall also constitute a concentration within the meaning of the merger control rules. The joint venture must have sufficient resources to operate independently in a market, have activities going beyond a specific function for its parent companies and shall not be dependent on the parent companies for sales or purchases and therefore have access to a market. For example, the Competition Council has considered that the 'full-function' condition was not fulfilled if the sales of the joint venture were exclusively intended for its parent companies4 and if the joint venture did not conduct its activities as an independent economic actor on the market.5
The notion of 'control' is defined as resulting from rights, contracts or any other means that confer, either separately or in combination, having regard to the considerations of fact or law involved, the possibility to exercise a decisive influence on the activity of an undertaking and, notably:
As regards the notification thresholds, additional turnover thresholds have been introduced in the new legal framework by Law No. 104-12 and its Enforcement Decree, such that the notification of a concentration should take place when one of the following conditions is fulfilled:
Aside from these standard thresholds, specific turnover thresholds may be fixed by decree for certain sectors or geographical areas.
According to the Competition Council, despite these thresholds, foreign-to-foreign mergers are not subject to merger control if the Moroccan market is not concerned or impacted by the transaction.
These thresholds raise some uncertainties, in particular about the assessment of the turnover of the companies and the criteria of a transaction's impact on the Moroccan market. New rules are expected in the near future.
In 2021, the Competition Council published its second annual report since it was reactivated at the end of 2018, as 2019 was the first year of application of the new legal framework.
The Competition Council has been very active since its reactivation: it issued 53 merger decisions in 2019 and 59 in 2020 and handled over 100 transactions in 2021.
The vast majority of these transactions were authorised at the end of the first phase. However, second-phase investigations have been opened in a few cases (e.g., in September 2019, to allow the Competition Council to conduct an in-depth investigation of Uber's acquisition of the assets of its competitor Careem; in 2020, in the review of the acquisition of sole control of Transportation UK LTD by Alstom SA Bombardier; and in 2021, in the review of the acquisition by Volkswagen AG of some of Hella Aglaia Mobile Vision GmbH's assets). Moreover, to answer competition concerns identified by the Competition Council regarding the acquisition of Careem's assets, in September 2020 Uber Technologies proposed remedies relating to future prices and pricing practices.
In April 2022, the Competition Council also granted CMA CGM an exemption to the suspensive effect of the notification procedure, allowing it to complete an acquisition without waiting for its authorisation decision.
In May 2022, the Competition Council imposed its first fine for failure to notify an international merger transaction on Swiss company Sika AG for its acquisition of sole control of French company Financière Dry Mix Solutions SAS. The fine amounted to 11,670,215 dirhams.
After adopting several internal documents in 2019, such as its rules of procedure, in 2022 the Competition Council adopted a substantive guide on the implementation of compliance programmes within companies and professional organisations.
A merger must be notified before its completion and as soon as the parties concerned are able to present a 'sufficiently concrete' file to allow the investigation of the case, in particular when the project is formalised by an agreement in principle or a signed letter of intent, or when it follows the announcement of a public offer.
The suspensive effect of the filing obliges the parties to wait for the authorisation of the Competition Council (or the administration) to implement the contemplated merger. However, the Competition Council may grant the parties an exemption to this suspensive effect and allow them to complete all or part of the transaction without waiting for an authorisation decision in the case of duly motivated need.6
The sanctions for not filing and closing before clearance are the following:
The Competition Council may also compel the parties that failed to notify, subject to a daily penalty payment, to notify the operation, unless they revert to the previous state of affairs.
Since it became operational again at the end of 2018, the Competition Council has made merger control one of its top priorities and has announced its intentions to strengthen its control over mergers. Its first gun-jumping fine (of 11,670,215 dirhams) was imposed in May 2022 on Swiss company Sika AG for failure to notify its acquisition of sole control of French company Financière Dry Mix Solutions SAS.
During the first phase, the Competition Council must rule on the transaction within 60 days of receipt of the complete notification file. If commitments are offered by the parties, this 60-day period is extended by 20 days. In the case of particular necessity, such as the finalisation of the commitments, the parties may ask the Competition Council to suspend the deadline for a maximum of 20 days.
The Competition Council may, at the end of the first phase:
The governmental authority in charge of competition may ask the Competition Council to open a second-phase investigation within 20 days of having received a copy of the decision, or having been informed of it by the Competition Council. At the end of the 20 days, the authorisation is deemed granted.
During the second phase, the Competition Council must assess within 90 days whether the transaction is likely to infringe competition, notably by creating or strengthening a dominant position or a buying power that places suppliers in a position of economic dependency, and whether the contemplated transaction brings a sufficient contribution to economic progress to offset the competition infringements. If commitments are offered by the notifying parties to remedy the anticompetitive effects of the transaction less than 30 days before the end of the 90-day period, the deadline will then expire 30 days after the reception of the commitments. The 90-day period may be suspended for up to 30 days at the parties' request in the case of particular necessity, in particular to finalise their commitments. The Competition Council can also suspend the 90-day period, in particular when the notifying parties have failed to provide it with the requested information, or to inform it of the occurrence of a new material event. The time limit resumes when the cause of the suspension has been addressed.
At the end of the second phase, the Competition Council may:
Within 30 days of receiving a copy of the decision or of being informed of it by the Competition Council, the Chief of Government or the delegated governmental authority may exert their power and issue a decision on the transaction for reasons of public interest (such as industrial development, competitiveness of the companies within the international context or job creation).
At the end of these 30 days, the authorisation is deemed to be granted.
No accelerated procedure is provided.
Upon receipt of a notification file, a press release is published by the Competition Council, which indicates the name of the concerned parties, the nature of the transaction, the concerned economic sectors, a non-confidential summary of the transaction provided by the parties and the time frame in which interested third parties are invited to make observations.
A market test is carried out by the instruction services, and a third party that would be in a position to contribute to its information may also be heard by the Competition Council.
The merger decisions of the Competition Council and of the governmental authority in charge of competition are, in principle, published in the Official Bulletin and available on their websites (however, business secrets are, in principle, reserved for the Competition Council and the government commissioner).
Appeals against merger decisions can be lodged by the concerned parties or the government commissioner before the administrative chamber of the Moroccan Supreme Court within 30 days of receipt of the merger decision notification.
Under the former legal framework, the Moroccan competition authorities had entered into cooperation agreements with other national authorities.
An association between Morocco and the Member States of the European Union was created in 2000 by the Euro–Mediterranean Agreement and Decision No. 1/2004 of the EU–Morocco Association Council of 19 April 2004. Adopting the necessary rules for the implementation of the competition rules, the Association has set up a mechanism of cooperation between European and Moroccan competition authorities. In 2020, the Competition Council announced a new partnership with the EU to harmonise and converge competition law provision matters.
The Competition Council was also a founding member of the Euro–Mediterranean Competition Forum, an informal regional network set up in 2012.
A bilateral cooperation has been developed with the Tunisian competition authority.
Now that it is operational again, the Competition Council has expressed its willingness to strengthen and expand its cooperation with other jurisdictions.
In particular, in 2019, the Competition Council entered into an agreement with Spain's National Commission on Markets and Competition and announced its will to strengthen its bilateral cooperation with the Portuguese Competition Authority and the Chilean National Economic Prosecutor.
The Competition Council also announced new exchanges of information and expertise with China in 2019 and 2020.
In 2020, a memorandum was concluded between the Competition Council and the National Competition Authority of the Republic of Turkey to reinforce their bilateral relationships.
In March 2022, the Competition Council entered into a memorandum of understanding with the Hellenic Competition Commission.
Certain specific economic sectors are regulated in Morocco by sectoral authorities:
According to Law No. 104-12, the Competition Council will (as from a date to be defined by future regulation) exercise its jurisdiction over all economic sectors, unless the relationship between the Competition Council and the sectoral regulators is addressed in the constitutive texts of these institutions. These regulators must nevertheless be consulted by the Competition Council when the notified transaction concerns their specific sectors.
The allocation of jurisdictions between the Competition Council and these Moroccan sectoral regulators will therefore be clarified now that the Competition Council is fully operational. For instance, in 2019, the Competition Council and Bank Al Maghrib entered into a cooperation agreement establishing the conditions and terms of their collaboration on the competitive issues in the banking industry and, in 2021, cooperation agreements were concluded between the Competition Council and the Supervisory Authority for Insurance and Social Security, on one hand, and the Financial Market Authority, on the other. This clarification is especially important for the ANRT, which is authorised by constitutive texts to enforce antitrust and merger control provisions in the telecommunications sector and has already imposed its first fine (for an abuse of dominant position in 2020).
A minority ownership interest might fall under the scope of Moroccan merger control provided it constitutes a concentration within the meaning of Article 11 of Law No. 104-12 on free pricing and competition, according to which a concentration particularly requires an acquisition of control, defined as resulting from rights, contracts or any other means that confer, either separately or in combination, having regard to the considerations of fact or law involved, the possibility to exercise a decisive influence on the activity of an undertaking, and notably ownership rights or rights of use over all or parts of the assets of an undertaking or rights or contracts that confer decisive influence on the composition, voting or decisions of the organs of an undertaking.7 This may be the case in particular when the minority shareholder holds preference shares with special rights allowing it to determine the commercial strategy of the target company.
On the contrary, internal restructurings within groups of companies are not caught.8
Moreover, in the case of financial distress and insolvency of the target company, the parties may request the Competition Council to grant them an exemption to the suspensive effect of the merger control procedure, therefore allowing them to complete all or part of the transaction without waiting for an authorisation decision.9
Finally, Moroccan law does not provide any specific rules concerning public takeover bids.
The nominations of the members of the Moroccan Competition Council in December 2018 triggered the entry into effect of Laws Nos. 104-12 and 20-13, which grant the Competition Council decision-making power over merger control cases.
The Competition Council has been very active since its reactivation, handling over 100 mergers in 2021 and issuing its first annual reports and internal documents.
The many questions raised by the practical implementation of the rules of the new legal framework (such as the assessment of the thresholds or the allocation of jurisdictions between the Competition Council and the Moroccan sectoral authorities) shall hopefully be clarified in the future, through the Competition Council's development of its decisional practice and the adoption of new rules, especially relating to thresholds. New procedural rules, in particular the creation of simplified procedures, shall also be established.
The purpose of the new legal framework is to generally strengthen the role and powers of the Competition Council, which has expressed its intention to increase the means of its investigation services and to reinforce its control over merger operations (illustrated in May 2022 when the Council imposed its first fine for gun-jumping); more control can be expected in the future.
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