The long-awaited Competition and Consumer Protection Bill was finally published on 31 March 2014. Key reforms include the merger of the Competition Authority and the National Consumer Agency along with extended timelines for merger review and a fundamental restructuring of the media merger regime. The Bill proposes new enforcement powers and whistle-blower protections as well as a new procedure for handling disputes regarding legal privilege and a new power to issue 'Grocery Code' regulations.
Merger of the Competition Authority and the National Consumer Agency
The existing competition and consumer agencies will merge to create the Competition and Consumer Protection Commission. The CCPC's executive will comprise a Chairperson and a maximum of six members.
The statutory functions of the CCPC will be to promote competition and consumer welfare, in particular through enforcement activities. In terms of prioritisation of its competition and consumer mandates it may be necessary for the CCPC to allocate the greater part of its resources to the areas where its work load is uncontrollable (eg, merger control) placing a constraint on its ability to undertake pro-active enforcement activities, market studies, or consumer information campaigns.
Changes to Merger Control Regime
The most notable changes relate to an extension of time periods for merger review.
Other notable changes are as follows:
- The CCPC can issue a Request for Information to 'stop the clock' during Phase II. The current legislation provides for the issue of a RFI to 'stop the clock' during Phase I only.
- Clarification that an acquisition by a financial institution is notifiable where it is intended to facilitate an onward sale to an ultimate buyer that has assumed "the major part of the economic risks" of the overall deal.
- A merger filing will be invalid and a related merger determination void where the CCPC is of the opinion that "full information" has not been provided by the merging parties. This increases risk for merging parties, as the current test for invalidity / voidness relates to information that is "false or misleading in a material respect".
The Bill radically amends the current media merger regime. Key changes include:
- Changes to the jurisdictional test for media mergers. First, the Bill confirms that the statutory concept of 'carries on business' has the same meaning in the context of standard mergers and media mergers ie, (a) having a physical presence in the State (eg, a registered office, subsidiary, branch, representative office or agency and having made sales to customers located in the State, or (b) having made sales in the State of at least €2 million in the most recent financial year. Second, the Bill will expand the definition of media business to include online-only news sources, such that the regime now covers any acquisition of a website / blog "consisting substantially of news and comment on current affairs" with a physical presence and de minimis turnover. It will be interesting to monitor the scope of transactions that will be affected by this expansion in practice.
- Transfer of responsibility for the review of the media plurality issues from the Minister responsible for competition policy to the Minister for Communications.
- Introduction of a requirement to make two notifications - one notification to the newly formed CCPC and a separate notification to the Minister for Communications (each attracting a separate as yet unspecified fee).
- Clarification of the substantive test for identifying a media plurality concern. While the current legislation includes a range of 'relevant criteria', the Bill identifies a specific substantive test that the Minister's decision-making can be examined against, namely "whether the result of the media merger will not be contrary to the public interest in protecting the plurality of the media in the State".
- New role for the Broadcasting Authority of Ireland in the preparation of a report on media plurality issues for the Minister. The Minister must have regard to the BAI report in making its decision.
- Appeal mechanism from the Minister's decision on media mergers, reducing the standard Irish judicial review deadline of three months to 40 working days.
New Competition Enforcement Tools
The key changes are:
- The Bill introduces a new offence for failure, by any person, to disclose information to the police which he knows or believes might be of material assistance in relation to the prevention of the commission of a hard-core cartel offence (agreement to fix prices, limit output or share markets) or the investigation of any such offence.
- The Bill includes provisions designed to deal with disputes about whether business records taken as part of a CCPC competition investigation include legally privileged material. The Bill entitles the CCPC to seize material that is claimed to be legally privileged, insofar as its confidentiality is maintained pending determination of the claim of legal privilege. The High Court will determine whether material is legally privileged, on application by the CCPC or the owner of the material. The High Court may issue interim orders for the preservation of the material and it may appoint an independent legal advisor to prepare a report to assist the Court's decision-making.
- The Bill protects whistle-blowers from any penalisation by an employer on account of having communicated information regarding an alleged breach of law to the CCPC (insofar as the communication was made in good faith) or from any liability for damages.
The Bill includes a power for the Minister for Jobs, Enterprise and Innovation to issue secondary legislation (regulations) that mandates and / or prohibits particular supply chain practices. The regulations will apply to grocery retailers and suppliers with annual turnover of more than €50 million, known as 'relevant grocery good undertakings'. This scope contrasts with the UK Grocery Supply Code of Practice, which regulates large retailers only.
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