The Irish Competition and Consumer Protection Act (“the Act”) was passed on the 28th July 2014 and will make major changes to the Irish competition law regime. All businesses involved with mergers and acquisitions in Ireland would do well to familiarise themselves with the Act and prepare for its changes. The Act is due to enter force in Autumn 2014.
The Act includes the following reforms and changes:-
Institutional Reform. The Act establishes a new Competition and Consumer Protection Commission (CCPC) amalgamating the Competition Authority and National Consumer Agency to create a combined consumer and competition body. The Act sets out the powers, functions and structure of this new body. The CCPC’s structure is similar to that of the Competition Authority. It will be governed by an executive chair and between two and six members. Isolde Goggin, the current chairperson of the Competition Authority, is the chairperson designate of the CCPC.
Merger control. The Act changes and clarifies the financial thresholds which trigger the requirement to make a merger control filing. In contrast to the previous rules, no worldwide turnover threshold applies and the Act changes the relevant turnover figures for Republic of Ireland turnover. The new financial thresholds will be as follows:
- combined turnover in the Republic of Ireland of all of the undertakings involved is not less than EUR50 million; and
- turnover in the Republic of Ireland of each of two or more of the undertakings involved is not less than EUR 3 million.
The intention behind this change is to ensure that notifications have a real connection to the Republic of Ireland.
The Act also increases the timeframes for the review of mergers which potentially have the effect of significantly increasing the length of the review process.
The timeframe for an initial Phase I analysis is currently one calendar month. Under the new Act, this will be extended to 30 working days (6 calendar weeks). This initial period is subject to extension where a formal information request is made or remedies are proposed. The timeframe for a Phase II merger review will be extended to 120 working days, up from 4 calendar months. The new regime also introduces the ability to extend Phase II consideration where a formal information request is made or where remedies are proposed. Under the Competition Act 2002, no such extension in Phase II was available.
Finally, under the current regime, notification may only be made once the transaction agreement has been signed, and must be made within one month of signing. The new Act permits notification prior to the signing of an agreement, where the undertakings involved can demonstrate a good faith intention to conclude an agreement. This change could help to somewhat mitigate the impact of the longer review timeframes. However the CCPC may well in common with the UK CMA expect pre-notification contact given the more liberal stance on when a merger can be notified. There is no deadline for notification to the CCPC, although clearance must be obtained before completion. The merger notification fee remains at €8,000
New media merger regime. The Act introduces jurisdictional, procedural and substantive changes to the existing media mergers regime. The definition of media merger has been extended. So not only are traditional media businesses covered such as broadcasting, newspapers and magazines but the new rules now extend to include the publication of certain newspapers and current affairs periodicals over the Internet or the making available such content on an electronic communications network.
The new Act also introduces more stringent media merger notification requirements. Under the new regime all relevant media mergers must be notified not only to the CCPC but also separately to the Minister for Communications, Energy and Natural Resources (“the Minister”). Where the Minister opens a second phase examination, the matter must be referred to the Broadcasting Authority of Ireland (BAI). The Act also sets out the consideration periods for merger notifications.
The “relevant criteria” test to be applied by the Minister in his/her review is also amended by the Act. The Minister will consider whether the proposed transaction will impair the diversity of content and the diversity of ownership of media in the State. This is considerably more narrow than the existing statutory list of public interest factors.
Grocery Goods Undertakings. In an interesting parallel to the creation of the Grocery Code in the UK, the Act gives the Minister for Jobs, Enterprise and Innovation the power to make Regulations to govern relationships between “grocery goods undertakings” encompassing relationships between suppliers and retailers. The Regulations are aimed at regulating matters such as retailers seeking payment from a supplier to obtain shelf space or better shelf positioning, the manner in which certain terms and conditions are to be incorporated and the circumstances in which payments may be sought in respect of wastage and marketing costs. The CCPC will have powers to investigate alleged breaches of the Regulations, including the power to carry out inspections of grocery goods undertakings. Failure to comply with the Regulations will be an offence punishable by fines and imprisonment. In addition, aggrieved parties can seek damages from grocery goods undertakings which have breached the Regulations, and the CCPC will also publish a list of offenders (a “name and shame” provision).