Ireland: Media Mergers in Ireland - 2010 Perspective

Background - Current Irish Regime

Media mergers in Ireland are subject to the normal clearance provisions under the Irish Competition Acts 2002 to 2010 save that all media mergers must be formally notified to the Competition Authority, regardless of turnover thresholds.

This means that all media mergers that meet the territoriality tests set out under Irish law must be notified and approved in Ireland. Failure to notify has significant consequences including invalidity of the underlying transaction and potentially significant fines (both at an individual and a corporate level).

Irish law defines a media merger as a merger or acquisition in which one or more of the undertakings involved carries on a media business (being the businesses of (i) publication of newspapers or periodicals consisting substantially of news and comment on current affairs, (ii) providing a providing a broadcasting service, or (iii) providing a broadcasting services platform).

In addition to scrutiny by the Competition Authority, Media mergers are considered by the Minister for Enterprise, Trade & Innovation (the "Minister") who must have regard to the following criteria (the "relevant criteria") in determining whether or not to allow a merger to proceed:

• the strength and competitiveness of media businesses indigenous to the State,
• the extent to which ownership or control of media businesses in the State is spread amongst individuals and other undertakings,
• the extent to which ownership and control of particular types of media business in the State is spread amongst individuals and other undertakings,
• the extent to which the diversity of views prevalent in Irish society is reflected through the activities of the various media businesses in the State, and
• the share in the market in the State of one or more of the types of business activity falling within the definition of "media business" in this subsection that is held by any of the undertakings involved in the media merger concerned, or by any individual or other undertaking who or which has an interest in such an undertaking.

Advisory Group Report

In 2008, the Minister commissioned a report from a high level advisory group comprising experienced senior counsel and various industry figures (the "2008 Report"). The 2008 Report's findings were as follows:

• There should be a statutory definition of media plurality (referring both to ownership and content);
• The Competition Acts should be amended to incorporate a statutory test to be applied by the Minister in the discharge of his or her function in relation to media mergers;
• The current definition of the 'relevant criteria' in Section 23(10) of the Competition Act should be replaced;
• There should be an on-going collection and periodic publication of information in relation to media plurality in the State;
• The Competition Authority should not be required to form or furnish to the Minister an opinion on the application of the 'relevant criteria';
• There should be a separate system of notification of media mergers to the Minister for clearance;
• There should be an obligation imposed by Statute on parties to a media merger to provide full information to the Minister on all circumstances that might impair media plurality in the State and to notify any changes in information provided to the Minister, with appropriate penalties for non-compliance;
• The Minister should publish guidelines to assist undertakings involved in media mergers in knowing how the Minister would in general apply the relevant criteria;
• In the event of the Minister deciding to proceed to a detailed investigation of a proposed merger (other than a broadcaster to broadcaster merger), a three to five person Consultative Panel should be established on a statutory basis to provide advice to the Minister on the media merger;
• The definition of "media business" should be amended to include publication of newspapers and periodicals over the Internet and broadcast of certain audiovisual material over the Internet; and
• The important role of the media in a democracy should be recognised by law.

Although the Minister, at the time of the 2008 Report, indicated that legislation would be forthcoming in 2009 to act on its recommendations, no such legislation has yet been formulated.

Media Mergers 2008 – 2010

The 2008 Report summarised (at Appendix E) the details of all media mergers notified to the Competition Authority in the 2003 – 2007 period. Since 2007 to date there have been a further 16 media mergers notified to the Irish Competition Authority as follows: 

Where does this Leave Media Companies with Irish Operations?

With the Government fully engaged managing the country's economic affairs and addressing the significant levels of unemployment in the economy, it is unlikely that legislation to implement the 2008 Report's recommendations will be brought forward in the near term.

The Minister could, if so minded, effectively implement a number of the recommendations from the 2008 Report without additional legislation but it is likely to take a significant transaction to test the appetite of the Minister to act on the 2008 Report's recommendations in advance of the implementation of specific legislation.

While the media merger notifications that have been made to the Competition Authority since the 2008 Report have generally been uncontroversial, it remains to be seen if a significant shift in the Irish media sector might trigger a re-evaluation of the 2008 Report's recommendations.

We recommend that parties to significant media mergers with an Irish dimension should engage early in the process and ascertain the stance that the Minister is likely to take in relation to any necessary notification.

Relevant Links:

• The Irish Competition Authority Website
• The 2008 Report

Disclaimer

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