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  • Pablo Figueroa

Spanish NCA: Behavioural Commitments on Minority Shareholdings and Information Exchanges



Executive Summary


On December 5, 2019, CNMC approved, subject to commitments, the purchase by MIH Food Delivery Holdings of Just Eat. This transaction affects the segment for the management of food orders at home through online platforms.


According to the CNMC, the buyer holds a non-controlling minority shareholding in a competitor of the target.


The commitments will be valid for 3 years (extendable for another year) and will have as their main objective to ensure that the Naspers/MIH group: (i) do not have access to strategic information; nor (ii) participates in making decisions that affect Glovo's strategy, due to the risk of restrictive effects of competition that, pursuant to CNMC, could derive from either.


I. Background


On December 5, 2019, the Comisión Nacional de Mercados y de la Competencia (“CNMC”) authorized the purchase of Just Eat, an online food delivery platform, by MIH Food Delivery Holdings, part of the Naspers group. The operation was authorised after a first phase investigation of slightly less than one month (the transaction was notified on 7 November 2019) and subject to a number of commitments.


On October 22, 2019 MIH announced a takeover bid for MIH. Earlier in the year, on 19 September, the CNMC had authorised, this time unconditionally, a competing takeover bid by Just Eat for Takeaway, a Dutch company, as CNMC considered that the operation did not lead to horizontal or vertical overlaps (C/1061/19 TAKEAWAY / JUST EAT).


II. Jurisdiction


The transaction was notified to the CNMC in application of the market share threshold provided for in Article 8.1 a) of the Spanish Competition Act (Ley 15/2007, of 3 July, on the Defence of Competition.)


III. Substantive analysis


This operation falls within the sector of online food delivery via the Internet and mobile devices to an online platform. This industry has the following characteristics according to the CNMC:

  • It is "relatively concentrated";

  • t is characterised by indirect network effects; and

  • It is forecasted that, in the coming years, demand will "continue to grow at significant rates".

For the approval of this operation, the CNMC analysed the implications of the existence of a minority shareholding of the acquirer (MIH) in Glovo. According to CNMC, Glovo is the main competitor in Spain of the acquired company (Just Eat). Also according to CNMC, the purchase of these shareholdings may involve a risk of anti-competitive exchanges of information. More specifically, following the transaction, MIH would have access to the information made available to the boards of both Just Eat and Glovo. Also, and always according to CNMC, the presence of MIH in the board of Just Eat's main competitor creates an incentive in MIH to “prevent the expansion of this competitor's business” (presumably, in order to increase prices).


IV. The Commitments and their objectives


In these circumstances, CNMC subordinated its clearance of the concentration to the fulfilment of a number of commitments. The primary objective of these commitments is to ensure that MIH (Naspers Group) does not have access to Glovo's strategic information and cannot influence decisions that may relate to Glovo's business strategy.


More specifically, and always according to CNMC, the commitments:

  • make it impossible for MIH to influence the strategy developed by Glovo in markets where Glovo is or may be a competitor of Just Eat in Spain.

  • ensure that MIH cannot access commercial information that is sensitive of Glovo.

  • prevent Glovo from accessing Just Eat's sensitive information.


The duration of these commitments is set at 3 years. The CNMC has the possibility of extending them for a further year if it deems their continuation to be justified. In that assessment, the CNMC has indicated that will particularly consider the possibility of entry into the Spanish market of new competitors, particularly in the case of Glovo. In addition, in order to help the CNMC to ensure that MIH complies with its commitments, MIH must periodically send information to the CNMC so that the latter may check that its commitments have been effectively complied with.


V. Comments


This operation raises a number of interesting points, both in terms of jurisdiction and substantive analysis:


  • As we have highlighted in previous alerts, the CNMC continues to vigorously apply the market share threshold. Until December 1, this year 2019, 44 transactions were notified to the authority pursuant to this threshold (58% of the total reviewed in 2019).

  • With this transaction, the CNMC joins a number of competition authorities expressing concerns about non-controlling minority shareholdings (e.g., in the case of the European Commission, inter alia, the provisions on “common ownership” in case M.7932 DOW / DUPONT).

  • The CNMC's relatively interventionist stance on exchanges of information is arguably not so surprising in relation to a market that CNMC describes as “concentrated”. The CNMC itself has recently imposed sanctions for exchanges of information between competitors (Case S/DC/0607/17 TABACOS). EU law on information exchanges is more stringent than that of other jurisdictions (most notably the US). Spain tends to apply the EU rules in a particularly formalistic manner.

  • In the light of this, it may surprise some that purely behavioral commitments were accepted. It should be recalled in this respect that the European Commission Notice on Remedies clearly prefers structural commitments (divestitures) to behavioral commitments.[1] It could be argued that the commitments affect Napster's opportunities to favor cooperation, but not its incentive (which, after remedies, remains to coordinate the behavior of its two participated competitors).

  • Finally, the acceptance by the parties of the commitments is not surprising in relation to the second of the two competing takeover bids, which may place CNMC in a particularly strong negotiating position.

  • As we have indicated in previous alerts, the main (and, in general, relatively minor) intervention by CNMC generally occurs in Phase I.


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[1] Commission Notice on remedies admissible under Council Regulation (EC) No 139/2004 and Commission Regulation (EC) No 802/2004 (Text with EEA relevance), (2008/C 267/01).


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Garrido Abogados lawyers are available to assist in addressing any questions you may have regarding these developments. To learn more about these issues, please contact the Garrido Abogados lawyer with whom you usually work, any member of the firm’s EU and Competition department, or the following lawyers in Madrid:


Pablo Figueroa (+34 91 210 67 86, Pablo.Figueroa@garrido.es)


Julia González Fernández (+34 91 319 60 62, Julia.Gonzalez@garrido.es)



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