In its decision, the authority clarified the requirements for an entity to qualify as a potential competitor, a concept that is relevant when determining whether a transaction may affect competition in a relevant market and, therefore, whether it is subject to mandatory notification before the authority.
In this regard, the authority emphasized that the ability to participate in the market, a clear intention to enter the market, and a commitment to carry out the transaction in the near future must be assessed independently from the transaction under review. It further held that the mere existence of these circumstances is not sufficient. It must also be established that the potential competitor could exert an actual or potential competitive constraint on existing market participants, thereby generating competitive pressure that could arise in the future but had not yet materialized.
After analyzing the circumstances of the transaction, the authority found that the preparatory activities undertaken by the acquired company could not be dissociated from the asset purchase transaction itself. Accordingly, those activities did not establish that the company qualified as a potential competitor.
This case is relevant because it shows that, for purposes of competition law analysis, the mere potential ability to enter a market is not sufficient. There must be evidence that such entry represents a real, imminent, and independent possibility, separate from the transaction under review.
