The Competition and Consumer Protection Commission ("CCPC") confirmed on Friday, 14 June 2019, that it will proceed with plans to introduce a simplified procedure for the notification of mergers satisfying the relevant financial thresholds but that do not raise competition concerns. However, the procedure itself will not be adopted until 2020.
The Proposal
Parties notifying mergers under this procedure will use a different, shorter, form and will have to provide less information to the CCPC about their deal. This procedure will formalise the current adhoc approach whereby the CCPC can waive the requirement to complete certain parts of the standard notification form in cases where no overlap arises.
Mergers Covered
The procedure as envisaged in the consultation would also be used in all of the following circumstances:
- where none of the parties are active in the same markets, or in any upstream or downstream market from one another (ie no horizontal / vertical overlap arises);
- where two or more of the parties are active in the same market, but their combined market share is less than 15%;
- where one or more parties is active in a market upstream or downstream to another party, but the market share of each of the parties involved in each market is less than 25%; or
- where a party which already has joint control over a company acquires sole control of that company.
It is currently envisaged that parties intending to use this approach will engage in pre-notification discussions with the CCPC to confirm that their merger qualifies.
Benefits
Once adopted, this will bring the CCPC's processes into line with the practice of the European Commission and most other national competition authorities across the EU.
Together with the revised jurisdictional thresholds which came into effect on 1 January 2019 (see our article, here), it is to be welcomed and will significantly reduce the burden on businesses of notifying the CCPC (particularly those smaller deals that do not raise any material competition concerns).
The revised thresholds have already led to a significant fall in notifications year on year (ie as of 19 June 2019, 15 mergers have been notified to the CCPC compared with 50 for the same period in 2018).
Next Steps
This announcement follows a short consultation in December 2018. Responses were broadly supportive of such a move (available here), with some encouraging the CCPC to commit to quicker clearances of mergers notified under the new procedure and others cautioning the CCPC to ensure that the pre-notification discussions anticipated under the procedure (and currently a rarity) do not lead to delay.
We expect that the CCPC will take account of this constructive feedback in draft guidance, which it expects to publish for comment by the end of 2019.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.