Irish merger control – What are the main changes introduced by the Competition (Amendment) Bill 2022?

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Irish merger control – What are the main changes introduced by the Competition (Amendment) Bill 2022?Significant and wide-ranging new powers of intervention will be given to the Irish merger control authority i.e. the Competition and Consumer Protection Commission (CCPC), under the recently-published Competition (Amendment) Bill 2022 (Bill).

The Bill is currently being considered by the Houses of the Oireachtas (the Irish Parliament). The main changes introduced by the Bill, if enacted as currently drafted, to Irish merger control under the Competition Act 2002 (as amended) (Competition Act) will be:

A system for the compulsory notification of "below threshold" deals

  • Under the Competition Act, the compulsory notification thresholds for a deal are: (i) a combined turnover in Ireland of at least €60 million of all parties to the deal, and (ii) each of 2 parties to the deal with turnover in Ireland of at least €10m (these thresholds don't apply to "media mergers" under the Competition Act).
  • Currently, parties to a below threshold deal can voluntarily notify the CCPC under the Competition Act to avoid an investigation by (and obtain a green light from) the CCPC if there is a concern that the deal raises material competition issues in Ireland (e.g. if it substantially lessens competition (SLC) in Ireland).
  • As a result of the Bill, the CCPC will be able to "require" parties to a below threshold deal to notify the CCPC if it thinks that the deal "may... have an effect on competition" in Ireland.
  • This requirement to notify the CCPC can apply whether or not the deal has already been put into effect.
  • Many of the Irish merger control suspensory requirements will apply to such notifications, including the CCPC imposing "interim measures" (see below).
  • Even if such a below threshold deal isn't notified to the CCPC by the parties as required by the CCPC, the CCPC can still proceed to review the deal as if it had been notified; and the CCPC can also impose interim measures.
  • The Bill sets a potentially low "effect on competition" bar for the CCPC to be able to call-in a below threshold deal for notification.

The CCPC will be able to impose interim measures on deals

  • Currently, the CCPC can't impose interim measures in relation to notified deals under the Competition Act.
  • As a result of the Bill, the CCPC will be able to impose interim measures on the parties to primarily notified deals if there is a risk they "may have an effect on competition" in Ireland (again a potentially low bar).
  • Failure to comply with interim measures is an offence (i.e. fines of up to €250k (plus daily default fines)).
  • The CCPC can choose from a wide range of possible interim measures, including the parties refraining from taking steps towards putting the deal into effect, or from further putting it into effect.

Gun-jumping - An offence to put a deal notified to the CCPC into effect before it is approved by the CCPC

  • Currently, a deal that is, or should have been, notified to the CCPC and is put into effect before it is approved by the CCPC, is void under the Competition Act.
  • As a result of the Bill, it will also be an offence to put such a deal into effect before CCPC approval.
  • The undertakings, or persons in control of such undertakings who knowingly and wilfully permit the breach, are guilty of the offence and are subject to fines of up to €250k (plus daily default fines).
  • This change significantly increases risks for businesses which complete deals prior to CCPC approval.

Gun-jumping - Power of the CCPC to bring gun-jumping prosecutions before the District Courts

  • Currently, the Director of Public Prosecutions brings summary proceedings before the District Courts for breach of the Irish merger control prohibition on gun-jumping.
  • As a result of the Bill, the CCPC will be able to bring its own summary proceedings for such breaches, including for failure to comply with information requirements by the CCPC.

The CCPC will be able to unwind/dissolve completed deals

  • Currently, the CCPC can't unwind or dissolve completed deals under the Competition Act.
  • As a result of the Bill, where the CCPC finds "on completion of a full investigation" that a deal would SLC in Ireland and that deal, that required to be (or was voluntarily) notified, had been put into effect without prior CCPC approval, the CCPC will be able to require that the:

deal be unwound or dissolved, including through the dissolution of the deal or the disposal of the shares or assets acquired, to restore the situation prior to the deal having been put into effect, or

parties take appropriate steps to restore (as far as practicable) the situation before the deal was put into effect, where it is not possible to unwind or dissolve the deal.

Other Irish merger control changes introduced by the Bill

  • Parties to a completed deal which: (i) was not required to be notified to the CCPC, and (ii) wasn't voluntarily notified to the CCPC, will be able to notify the CCPC for approval under the Competition Act, but the deal may be subject to interim measures.
  • There will be a process for the CCPC formally to confirm to parties whether or not they have complied with Requirements for Information (RFIs) in relation to a deal.
  • In addition to the parties to a deal, the CCPC will be able to issue an RFI to any other person/undertaking that it believes may have relevant information to enable the CCPC to review the deal.

Comment

These additional CCPC merger control powers, if ultimately enacted, are going to add uncertainty and possible time-delay before certain deals can safely complete under Irish merger control. Market monitoring of deals by the CCPC will become an even more important aspect of the CCPC's overall Irish merger control functions. It's notable that while the compulsory notification thresholds under the Competition Act remain the same, the Bill gives greater liberty to the CCPC to intervene in relation to below threshold deals (potentially where there is only some effect on competition). These wider powers of intervention under Irish merger control are similar to the European Commission's ability to intervene under EU merger control (e.g. Article 22 of the EU Merger Regulation and interim measures) as well as the Competition and Markets Authority's wide powers of intervention under UK merger control. The Bill is a priority piece of legislation for the Irish Government so its eventual enactment is likely to be in the near term.

By Alan McCarthy, of A&L Goodbody's EU, Competition & Procurement team.