Yes, the Law for the Strengthening of the Competition Authorities No. 9736 ("Law 9376") came into effect in November 2019. This law modifies the Law for the Promotion of Competition and Consumer Protection No.7472 and introduced a whole new merger control regime applicable for all markets, including telecommunications.

The Commission for Promotion of Competition (“COPROCOM”) is in charge of reviewing and approving mergers and similar transactions. The General Superintendency of Telecommunications (“SUTEL”) is the regulatory and competition authority for the telecommunications markets.

Regarding concentrations that involve one or more entities supervised by the financial system regulators, the National Council for Supervision of the Financial System (Conassif) will have powers, in exceptional circumstances to take over the case. Furthermore, in the financial sector, all cases that do not meet the merger control notification thresholds of the competition authority must be notified to the financial regulator.

No, there is no supranational regulatory agency with exclusive competence. 

Yes, if after making an analysis of the transaction the parties conclude that the operation must be notified to COPROCOM or SUTEL, the filing must comply with specific requirements which are fixed by Law 9736. This filing requirement demands (i) detailed description of the operation and a justification of the transaction; (ii) list of the economic agents involved; (iii) ownership structure of the economic agents involved ; (iv) business activities of the economic agents, (v) a description of relevant markets affected by the transaction; (vi) information relative to the notification thresholds; (vii) any additional information that may be relevant for the application.

Three selection criteria are used in order to determine if a merger must be notified to COPROCOM. The scenarios in which mergers have to be submitted to the institution are the following:

1. There are at least two economic agents with activities with incidence (direct or indirect presence) in Costa Rica, at any time during the last two fiscal years.
2. The sum of total gross sales or the value of productive assets of all economic agents involved in the transaction exceeds the threshold set by COPROCOM. COPROCOM has set a threshold on thirty thousand base salaries, which is around USD $22.3 million (obviously this amount varies depending on the exchange rate, and it can be changed by COPROCOM at any time; therefore, this must be checked on a case-by-case basis).
3. That at least two of the economic agents involved in the transaction have gross sales or productive assets over the threshold set by COPROCOM. COPROCOM set this threshold on fifteen hundred base salaries, which is around USD $1.1 million. In telecommunication markets, all concentrations need to be notified before SUTEL.

No, at this moment, minority investments do not have to be notified, except when the investment grants some kind of control, positive or negative (e.g. veto powers).

No. The only scenario in which a merger that involves foreign economic agents must be notified is when the transaction also includes at least two economic agents that have a direct or indirect presence in the Costa Rican market.

As explained in our response to "What kinds of transactions are "caught" by the national rules? (Identify any notable exceptions.)", the following two are the economic thresholds for notification before COPROCOM in our country:

• The sum of total gross sales or the value of productive assets of all economic agents involved in the transaction exceeds the threshold set by COPROCOM. COPROCOM has set a threshold on thirty thousand base salaries, which is around USD $22.3 million (obviously this amount varies depending on the exchange rate, and it can be changed by COPROCOM at any time; therefore, this must be checked on a case-by-case basis).
• That at least two of the economic agents involved in the transaction have gross sales or productive assets over the threshold set by COPROCOM. COPROCOM set this threshold on fifteen hundred base salaries, which is around USD $1.1 million.

Filing is mandatory in Costa Rica.

Notification must be made before the closing of the merger. 

Yes, after filing has been made, the authority has 15 calendar days to ask for missing or additional information regarding the transaction and must render the final decision on the first phase of the proceeding (approval, approval subject to commitments offered by the applicants, or open the second phase of the proceeding) within the following 30 calendar days from the moment the parties have provided all information required by the institution. In practice, the first phase process normally takes 2 to 3 months, taking into consideration the information requirements that the authority can make and the 30-day period to resolve. If the authority considers, based on justified reasons, that the operation poses a risk to competition, it will order the second phase of the proceeding, for up to 90 additional calendar days. In practice, cases sent to the second phase take 6 to 7 months in total.

The authorities have not issued new guidelines and there are no preestablished application forms. The filing requirements are the following:

1. a detailed description of the operation and a justification of the transaction;
2. list of the economic agents involved;
3. the ownership structure of the economic agents involved;
4. business activities of the economic agents,
5. a description of relevant markets affected by the transaction;
6. information relative to the notification thresholds;
7. any additional information that may be relevant to the application

In cases where the economic agents identify risks to competition, they can present, together with the notification requirements, commitments to mitigate said risks. But they can also do that at any time during the proceeding.

No payment is to be made to the authority, yet. On May 16, 2023, a fee came into force, but its collection was suspended by the authority on June 14, 2023.

The new law created a whole new two-phase compulsory pre-merger control proceeding. The first phase must be concluded in 30 calendar days and the second phase can take 90 additional calendar days. Only those cases that pose risk to competition (harm to competition) will proceed to the second phase. The parties may try to shorten the proceeding on this type of case by offering commitments when filing if they anticipate that the transaction will create risks to competition.

The substantive test for clearance is for the merger is harm to competition In the assessment the authority must consider the creation or increase of market power, the possible coordination effects of the mergers and if there are adverse effects to consumers.

Approval of the transaction, approval subject to commitments offered by the applicant, approval subject to conditions or declination of the operation.

Yes, parties can proactively offer commitments to the agency to remedy identified competition concerns. They can do so when filing, or during the second phase of the proceeding.

There are the following sanctions:

• Late filing is a minor offense: penalty may be up to 3% of gross income (volume de negocio).
• Failure to file or implement the merger before the authorization from the competition authority is a serious offense: penalty is up to 5% of gross income (volume de negocio).
• Late filing, failure to file or implementation of the merger before the authorization from the competition authority in the case where the merger causes anticompetitive effects is a very serious offense and the penalty is up to 10% of gross income (volume de negocio).

See response to "Describe the sanctions for not filing or filing an incorrect/incomplete notification." above.

No, the competition authorities cannot challenge mergers that are not notifiable.

The competition authority must open an investigation before it may impose any fines on economic agents involved in a merger/transaction that has not been notified. The affected market undertakings must be notified of the investigation and must be given the opportunity to present their arguments, evidence and defend themselves. If the competition authority orders it and an administrative law judge previously authorizes it, the technical department of the commission may execute inspections (dawn raids) in the commercial premises of the economic agents involved in the investigation.

COPROCOM and SUTEL do a very good job regarding the regulation of mergers in our country. Despite the short period of time the authority has to define its position in a specific transaction, they always comply with the terms stipulated in the law. However, the extent and depth of the economic analysis have been very limited in most cases, particularly in the analysis of efficiencies alleged by the parties.

The authorities are still in the process of issuing the executive regulations of the new law and drafting the guidelines on several areas for the application of the law. They are expected to be issued before the end of 2021. These regulations and guidelines should bring more clarity and a detailed guide on the application of the law.