Introduction

The Department of Jobs, Enterprise and Innovation yesterday, 31 March 2014, published the Competition and Consumer Protection Bill 2014 (the “Bill”). Apart from the headline amendment of the merger of the National Consumer Agency and the Competition Authority (the “Authority”) into a new agency named  the Competition and Consumer Protection Commission (the “CCPC”), the Bill proposes:

  1. Major change to Irish merger control procedures to allow for substantially longer Phase 1 and Phase 2 review periods (mandatory reporting thresholds and the substantive merger control test remain unchanged);
  2. Restriction of the “warehousing” exception in merger cases;
  3. Complete overhaul, both substantially and procedurally, of the merger control regime applicable to “media mergers”; and
  4. New criminal enforcement powers  for cartel investigations, including creation of an offence where “any person” fails to report information on a cartel.

According to the Minister, the Bill may be enacted by July 2014, although this seems ambitious.

Amendment of Merger Control regime

The Bill proposes to make certain amendments to Part 3 of the Competition Act 2002, (the “Competition Act”), which contains the merger regime rules. The key amendments are as follows:

  • Extension of the time periods which the CCPC will have to consider a notified transaction and a new power to ‘stop  the clock’ during a Phase 2 investigation following a formal information request from the CCPC.
    • The CCPC will have an initial Phase 1 period of 30 working days (6 weeks), subject to any suspension for a formal information request, in which to decide whether to allow a transaction to be put into effect or to open a Phase 2 process (the Authority currently has a 1 month period).
    • This 30 working day period can be extended to 45 working days (9 weeks) where the parties have proffered commitments (the Authority currently has an extended period of 45 days).
    • Where a Phase 2 process has been initiated, the CCPC will have 120 working days (6 months) from the date of receipt of the notification or, where formal requests for information have been made by the CCPC within 30 working days of receipt of the notification, it will have 120 working days from date on which the information requirement has been complied with (the Authority currently has a 4 month period).
    • New provision for the 120 working day period to be suspended following  a formal request for further information by the CCPC within 30 working days of the date of a decision to commence a Phase 2 investigation. The period recommences on the date the information is submitted.
    • If the parties have submitted commitments for consideration during the Phase 2 investigation, the 120 working day period is extended to 135 working days.
  • Provision for parties to request an extension of the time period specified by the CCPC for submission of formally requested  information.
  • Restriction of the exemption from notification for control acquired, through an acquisition of securities, by a firm that carries out transactions or dealings securities for its own account or for the account of others, where the exercise of the related voting rights is limited to arranging the sale of the undertaking, its assets or securities. The Bill clarifies that the exemption will not be available where the firm has acquired control on the basis of the onward transmission of the business to an ultimate buyer who will bear the major part of the economic risk.

The Bill also proposes an overhaul of the media merger regime in Ireland, with the aim of modernising the regime. One notable amendment is the revision of the definition of “media business” to include the publication of newspapers and periodicals over the Internet and the making available of certain audio-visual media consisting substantially  of news and comment on current affairs on an electronic communications network.

Changes to enforcement regime with particular impact for cartel enforcement

The Bill proposes to provide the CCPC with additional enforcement powers, in particular in relation to the investigation of offences under section 6 (offence of entering an anti- competitive agreement) or section 7 (offence of an abuse of dominance) of the Competition Act.

Importantly, the Bill proposes to amend the Criminal Justice Act 2011, so that an offence under section 6 of the Competition Act of engaging in an agreement to fix prices, limit output or share markets (ie a hard-core cartel offence) is brought within the scope of that legislation so that its provisions will apply to these hard-core cartel offences. Accordingly, if the Bill is enacted, it will be a criminal offence pursuant to the Criminal Justice Act 2011 for “any person” with information which he/she knows or believes might be of material assistance in relation to prevention of the commission of a hard core cartel offence or the investigation of such offences to fail to disclose that information to the Garda Síochána.

Creation of new authority- Competition and Consumer Protection Commission

As noted above the Bill proposes to merge the Competition Authority and the National Consumer Agency into a new entity, named the Competition and Consumer Protection Commission, with a view to creating a single supervisory body responsible for promoting competition and advancing and protecting the welfare of consumers.

Amendment to regulation of the grocery sector

The Bill also proposes to empower the Minister for Jobs, Enterprise and Innovation to make regulations in relation to particular aspects of the commercial relationships between large participants in the grocery goods sector (ie broadly, an annual worldwide turnover of the participant or its group of €50m) and other participants in the sector in relation to the sales or supply of grocery goods. The Bill details the types of issues which any such Regulations might cover. These include items such as the form of contract to be entered into for supply of grocery goods, the variation of contracts of sale or supply of grocery goods and provisions relating to delays outside of the reasonable control of a party.