Ireland's Competition and Consumer Protection Commission (CCPC) has been considering for some time as to whether to introduce a simplified merger notification procedure.
Between 7 November and 21 December 2018, the CCPC conducted a public consultation on whether a simplified procedure should be introduced.
On 14 June 2019, the CCPC announced its decision to introduce a Simplified Merger Notification Procedure for certain transactions.
On 29 October 2019, the CCPC has initiated a consultation on its proposed "Simplified Merger Notification Procedure Guidelines". The consultation will be open until 5pm, 29 November 2019.
Any reform which simplifies matters for business is very welcome. But simplification can lead to uncertainty and therefore businesses should study carefully the 13-page draft guidelines carefully to see how they would operate in practice.
Some notable points include:
- Paragraph 1.4: "Notwithstanding its initial acceptance that a merger or acquisition can be appropriately dealt with through the Simplified Merger Notification Procedure, the CCPC may at any point revert to a standard procedure for merger notifications…(“Standard Merger Notification Procedure”). This may occur, for example, if new information comes to light which suggests that the Simplified Merger Notification Procedure would be inappropriate" – this seems sensible but it means that there is no guarantee that the procedure will remain the simplified one despite spending time in the simplified procedure.
- Paragraph 2.1: market share figures will be crucial to deciding whether some deals fall within the scope of the simplified procedure – this is normal but businesses need to know that market definition is an inexact science and while the businesses might believe that they are within the simplified procedure, the CCPC might well define the market more narrowly during the procedure thereby increasing the market shares of the parties involved and taking the deal out of the simplified procedure.
- Paragraph 2.3: business gets a useful reminder from the CCPC in this paragraph that in "appropriate cases, the CCPC may revert to the Standard Merger Notification Procedure, at any point" so there may be situations where it is safer to opt for the Standard, rather than Simplified, Merger Notification Procedure to avoid having to "re-do" one's homework.
- Paragraph 2.9: the CCPC says that it is unlikely to apply the Simplified Merger Notification Procedure to mergers or acquisitions that involve maverick firm(s). That is sensible but difficult to apply in certain situations where business can often perceive themselves as being more maverick than they are in reality.
- Paragraph 2.10: the CCPC says that it is also unlikely to apply the Simplified Merger Notification Procedure in the case of "pipeline products" – this will be interesting to apply in practice.
- Paragraph 2.14: where "a third party submission(s) is/are received by the CCPC, and competition concerns are raised, the Simplified Merger Notification Procedure will not be applied. The CCPC will revert to the Standard Merger Notification Procedure to fully assess the third party submission(s)" – it would be helpful if a word like "genuine" was added before "competition concerns" otherwise it would appear that almost any third party submission would transform a notification from the simplified to the standard procedure.
- Paragraph 2.15: the "CCPC is unlikely to apply the Simplified Merger Notification Procedure to mergers or acquisitions which take place in new or novel markets. The Simplified Merger Notification Procedure will also not be applied to mergers or acquisitions which raise new or novel legal issues."
The draft guidelines set out several exceptions (as one would expect) to the Simplified Merger Notification Procedure. It may well be that the new regime may therefore be used relatively sparingly because there are many situations where it will not apply. This is all the more so given the increase in the turnover thresholds since 1 January 2019 – which has seen a fall in the number of compulsory merger notifications of around 60% Year on Year so far in 2019. The reform is to be welcomed but it may not be used as often as it might have been when it was first contemplated.