The Competition and Consumer Protection Act 2014 (the "Act") significantly alters the Irish competition and merger control landscape.
The Act entered into force on 31 October 2014. As a consequence, the Competition Authority and National Consumer Agency have merged creating a unified competition and consumer protection regulator and which is called the Competition and Consumer Protection Commission (the "Commission").
Whilst primary functions have not changed, the Act overhauls the prevailing merger control regime and strengthens the Commission's powers to investigate and enforce competition law breaches.
New Thresholds for Merger Notifications
Under the new regime, undertakings must notify a proposed transaction where, in the most recent financial year:
- the aggregate turnover in the Republic of Ireland of all undertakings involved is not less than €50 million, and
- the turnover in the Republic of Ireland of each of two or more of the undertakings involved is not less than €3 million.
Extended Timelines for Merger Notifications
The Act has significantly extended the length of time the Commission has to consider notified mergers.
The Phase I review period has been extended from one month to 30 working days. If the Commission decides to open a Phase II investigation, the Commission has a period of 120 working days to conduct its review (extended from 4 months). Both periods are extendable where information requests are issued by the Commission or where remedies are proposed. Notably, the Commission can now also 'stop the clock' in Phase II by issuing a formal information request within 30 working days from the date of the decision to open a Phase II investigation.
New Media Merger Regime
Media mergers continue to be subject to mandatory notification irrespective of turnover of the undertakings.
For a media merger to be notifiable, at least one of the merging parties must carry on 'a media business in Ireland', which is now defined as:
- having a physical presence in the State (i.e. the Republic of Ireland), including a registered office, subsidiary, branch, representative office or agency and making sales to customers located in the State; or
- having made sales in the State of at least €2 million in the most recent financial year.
It is important to remember that the Act now also extends the definition of 'media business' to include online media businesses.
Under the new rules, parties to a media merger are now required to make two separate notifications; one notification to the Commission (or to the European Commission where appropriate) and a second notification to the Minister for Communications, Energy and Natural Resources (the "Minister"). Importantly, a media merger can only be notified to the Minister after the Commission has rendered its determination – the applicable time periods, accordingly, cannot run parallel.
The Commission's investigation will continue to be based purely on a competition law review. The Minister's review, on the other hand, will focus on the effect of the proposed transaction on media plurality and diversity in Ireland.
New Timelines for Media Mergers
In Phase I, both the Commission and the Minister have an initial period of 30 working days to review a media merger. In Phase II, the Commission has 120 working days to make a determination on a media merger, whereas the Minister has 130 working days. Again, these timescales are extendable where formal information requests are issued or where remedies are proposed.
Potential to Notify Earlier
Significantly, there is no longer a specific deadline for notification to the Commission. Notifiable transactions must simply be notified prior to their closing/implementation. In a welcome development, notifiable transactions can now be notified as soon as the undertakings can demonstrate a 'good faith intention' to conclude an agreement or, in the case of a public bid, where there is an announced intention to make a bid.
The Act also introduces a number of significant changes to the competition enforcement regime. For example, the Act sets out clear and comprehensive powers of investigation for the Commission's authorised officers during dawn raids. Authorised officers may, on production of a warrant, enter, if necessary by force, a business or any other premises including a home, and search, seize or secure any documentation relevant to an investigation. Further, the Commission may compel the disclosure and take possession of information, even if it might reasonably be considered to be protected by legal privilege, but provided it is kept confidential until a determination on the matter is made by the Irish High Court.
Whilst it was widely recognised and accepted that the timeframe, in particular for a Phase II investigation, was tight, the increase by almost 50 per cent of the basic review period for both Phase I and Phase II, with the power to stop the clock multiple times, seems, to us, to be excessive.
On the enforcement side, the new regime underlines the need for international companies with operations in Ireland to ensure that they have in place bespoke dawn raid training and procedures.
The content of this article is provided for information purposes only and does not constitute legal or other advice. Mason Hayes & Curran (www.mhc.ie) is a leading business law firm with offices in Dublin, London and New York.
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