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Amendments to the Competition Law Regulations and Organizational Statute of the Competition Regulatory Authority

We hereby inform the business community and other interested parties about two recent innovations in the competition legal framework in the country.

Articles 11 and 17 of the Competition Law Regulations were amended by Decree no. 101/2021, of 31 December. As result of the amendments, the limits of turnover requiring a regular notification of a business concentration were increased as follows:

  1. the turnover generated individually by at least two companies participating in the operation increases from MZN100 million to MZN105 million (where market share equal to 30% but less than 50% is acquired, created or reinforced ;
  2. the turnover required for the cluster of companies involved in in the business concentration increases from MZN900 million to MZN925 million, provided that the business volume of at least 2 companies that participate in the operation is each greater than MZN105 million.

On other hand, it is now foreseen that the simplified merger notification procedure at Competition Regulatory Authority (“CRA”) will apply to the operations that, in addition to falling outside of the thresholds established in the Competition Law Regulations, involve at least 2 companies that participate in the operation individually with a turnover greater than MZN105 million.

The new Organizational Statute of the CRA was also approved by Decree no. 96/2021, of 31 December. Below, is an indication of some of the main amendments:

  • CRA will, under the exercise of regulatory powers, assist the Government with the refinement of the competition rules and practices, study the best measures or those which seem necessary for the improvement of the competition legislation and, weigh in on questions regarding the promotion and defense of competition.
  • Special duties of reasoning, information and secrecy were added in order to safeguard the rights of the companies, maintain trust and responsibility.
  • The number of sectorial regulatory entities which should articulate with CRA increased and these will also be integrated into the CRA’s Consultative Counsel.
  • The CRA Board is now composed of five members, including the Chair, for a term of five years, renewable once only.
  • For the members of CRA Board, the guarantees of independence and immovability were attributed. We note that the prohibition contained in the previous decree on the establishment of any contractual relationships after the cessation of duties with companies or groups of public or private companies that participated in concentration operations subject to CRA perusal or that had been stakeholders or recipients of proceedings for restrictive competition practices during their mandate. Notwithstanding, we understand that the limitations of the Public Probity Law are still applicable.
  • The Anti-Competitive Practices Investigation, a division dedicated specifically to the application of rules that prohibit the restrictive practices of competition (as cartel and abuse of dominant position) has been restored.
  • The Concentration Control Division (now known as the Concentration Control and Economic Studies Division) also has competencies to carry out studies on determined sectors, markets or legislative evolutions with impact to competition.
  • About the revenues, the consignation of 5% of the amount charged by the sectorial regulatory entities, previously approved by the Ministerial Diploma no. 32/2021, of 21 May and revoked by the current decree, has been enshrined.
  • The CRA Board is granted a period of 60 days and 90 days to approve the Internal Regulations and the proposal of staff framework to be appointed by the competent body, respectively.