The review procedure that will apply to a merger, acquisition or joint venture that comes within the scope of the CCPC's jurisdiction is set out below. There is no specific review procedure in respect of public takeovers.i Financial thresholds
Mergers, acquisitions and full-function joint ventures that meet the financial thresholds in the Competition Acts 2002–2017 must be notified to the CCPC before they are put into effect.
The financial thresholds that trigger the requirement to notify the CCPC have recently been revised pursuant to the Competition Act 2002 (Section 27) Order 2018 (S.I. No. 388 of 2018). As of 1 January 2019, the CCPC must be notified of a proposed transaction where, for the most recent financial year:
- the aggregate turnover in the state (i.e., Ireland) of the undertakings involved is not less than €60 million; and
- the turnover in the state (i.e., Ireland) of each of two or more of the undertakings involved is not less than €10 million.
The new thresholds ensure that firms that fall between microenterprises and small enterprises are not required to mandatorily notify unnecessary mergers and acquisitions and bring Ireland's financial thresholds closer to international norms.
These thresholds are disapplied for 'media mergers'.
The CCPC also has jurisdiction under Sections 4 and 5 of the Competition Acts 2002–2017 to investigate mergers that fall below these thresholds (i.e., if it believes that the merger could have as its object or effect the prevention, restriction or distortion of competition, or involves the creation or strengthening of a dominant position).
As for the geographical allocation of turnover, for the purposes of the above-mentioned turnover thresholds, a guidance note by the CCPC provides that 'turnover in the state' means sales made or services supplied to customers within the state.
The substantive test for assessment of competition issues by the CCPC is whether 'the result of the merger or acquisition would be to substantially lessen competition in markets for goods or services' in Ireland (referred to as the SLC test).ii Notification
Merging parties can notify the CCPC of a proposed merger once they can demonstrate that 'a good faith intention to conclude an agreement or a merger or acquisition is agreed'. A filing fee of €8,000 is payable to the CCPC for all mergers. Under the Competition Acts 2002–2017, there is an obligation on 'each undertaking involved' to notify the CCPC (i.e., the seller and the purchaser). In practice, joint filings are submitted and the purchaser tends to lead on the drafting of the notification.iii Timeline
The Competition Acts 2002–2017 provide for a two-phase review process. The CCPC has an initial 30 working days (Phase I) from notification to decide whether to allow the merger to be put into effect on the grounds that the merger does not trigger the SLC test or that it will not carry out a more detailed investigation. During Phase I, the CCPC may also issue a formal request for information (RFI) from the parties, in which case the 30 working days run from the time of receipt by the CCPC of the RFI (i.e., it has the effect of stopping and restarting the clock and the review period does not restart until the RFI has been complied with). If the CCPC has concerns about the likely effects of a transaction, it will initiate a more detailed second-phase investigation. In this case, it has a total of 120 working days from notification (known as Phase II) within which to decide whether the merger should be allowed unconditionally, allowed subject to conditions or prohibited. As in Phase I, the CCPC may 'stop the clock' on its merger review by making a formal RFI.
As noted above, media mergers are treated separately. While one notification in respect of a media merger must be submitted to the CCPC, the Competition Acts 2002–2017 require a second, separate notification to be submitted to the Minister. If the CCPC determines at the end of a Phase I investigation that the media merger does not trigger the SLC test, it must inform the Minister, who then has 30 working days to consider the media merger, commencing 10 days after a CCPC determination clearing the merger. If the Minister is concerned that the media merger may be contrary to public interest in protecting plurality of the media, the Minister will request the BAI to carry out a Phase II examination. Once in receipt of a BAI report, in these circumstances the Minister has 20 working days in which to make the final determination on the media merger and has the power to prohibit the merger or impose stricter conditions, again based on public interest criteria.
Of the 98 notifications received by the CCPC in 2018 (a 36 per cent increase compared to 2017), 14 (14.3 per cent of cases) required an extended Phase I review (i.e., a formal RFI was issued by the CCPC) and there were 3 Phase II reviews (compared to none in 2017). Between 1 January 2018 and 31 December 2018, the CCPC took an average of 24 working days to issue a Phase I decision. To date, only three mergers have been blocked by the CCPC: IBM/Schlumberger, Kingspan/Xtratherm and Kerry/Breeo.iv Failure to notify
Failure to notify a transaction that falls within the scope of the Competition Acts 2002–2017, or to supply information requested by the CCPC within the specified time limit, can constitute a criminal offence punishable by a fine of up to €250,000, plus €25,000 per day for a continued breach. In 2019, following a year-long CCPC investigation, the first successful gun-jumping prosecutions were secured in Ireland. Both Armalou Holdings Limited and Airfield Villas Limited (formerly Lillis O'Donnell Motor Limited) plead guilty to six charges arising out of their failure to notify the CCPC of Armalou's takeover of Lillis O'Donnell Motor Limited in December 2015. The parties were ordered, pursuant to the Probation Act 1907, to each make a charitable donation of €2,070 instead of paying criminal fines, because the District Court was satisfied there had been no wilful breach of the law as neither company had been aware of their obligation to notify the merger.
In addition, transactions that are put into effect without the approval of the CCPC are void under Irish law. To date, the CCPC has not taken legal action against any parties to a merger where a transaction has been put into effect prior to clearance, although it has publicly condemned this type of behaviour.v Mergers below notification thresholds
Mergers below the notification thresholds can also potentially limit competition. The Competition Acts 2002–2017 provide for a voluntary merger notification system for mergers that do not meet the thresholds but still raise antitrust issues. Once notified, voluntary notifications are dealt with in the same way as mandatory notifications.vi Appeal
A determination by the CCPC to prohibit a merger, or permit a merger subject to conditions, can be appealed to the High Court by the parties to the transaction. Complainants and third parties do not have a right of appeal, but may apply to the High Court for judicial review of a CCPC determination.vii Confidential information
As a public body, the CCPC is subject to the Freedom of Information Act 2014. Notwithstanding, the Act provides for exemptions for the release of commercially sensitive information by public bodies. In general, the CCPC handles commercially sensitive information in accordance with its strict confidentiality obligations. Following receipt of a merger notification, the CCPC will publish a standard notice on its website stating that the transaction has been notified to it, and detailing the parties and industry involved.
The merger notification form submitted by the parties will not be made public; however, the CCPC's decision (which may contain information from the notification form) will be published. In practice, the CCPC will allow the parties an opportunity to request the removal or redaction of any commercially sensitive information from the determination prior to publishing a non-confidential version of the determination on its website.viii Coordination with other jurisdictions
The Competition Acts 2002–2017 enable the CCPC to enter into arrangements with antitrust bodies in other jurisdictions in relation to the exercise of its merger control function. One of the questions on the standard notification form requires the parties to identify the other jurisdictions where the transaction has been or will be filed. In certain circumstances, the CCPC seeks the consent of the notifying parties to enable it to discuss the case with antitrust officials in other jurisdictions when a notification is made and to share information with them.
The CCPC is greatly influenced by the work of the International Competition Network and the European Competition Network, of which it is an active member. The CCPC also maintains regular contact with competition authorities in other jurisdictions, in particular the UK Competition and Markets Authority and the European Commission, as well as the antitrust bodies in the United States, regarding cases that are subject to parallel reviews in those jurisdictions that may affect Ireland.ix Third parties
Generally, a 10-day working period is provided for by the CCPC during a Phase I review (and a 15-day working period for a Phase II review) for third parties to submit comments expressing their views on the likely effects of a proposed transaction on competition in the market.