The Department of Business, Enterprise and Innovation (DBEI) launched a public consultation on the provisions relating to mergers and acquisitions under the Competition Act 2002 on Friday 29 September 2017 (Consultation).
The most recent amendments to Part 3 of the Competition Act 2002 (which relates to mergers and acquisitions) came into force on 31 October 2014. These amendments concerned, in particular, the financial thresholds and the number of days in which the Competition and Consumer Protection Commission must make a determination on a notified transaction. You can read more about the Irish merger control rules here.
The current review is being undertaken by DBEI in light of the fact that the relevant provisions have now been in force for almost three years and also because the financial thresholds may need to be revised given the recovery of the Irish economy.
The overall aim of the 2014 amendments was to ensure that merger notifications received by the CCPC had a real connection to the State by, for example, removing the worldwide turnover thresholds, having a combined turnover threshold and having a minimum turnover threshold.
However, the Consultation lists a number of issues which have arisen since the introduction of the thresholds including resourcing issues at the CCPC, financial costs for businesses of the notification fee on top of legal fees and also that uncertainty as to the outcome of the determination impacts bank funding and may lead to potential commercial damage on the operation of the business to be acquired. The Consultation also claims that the low individual financial threshold means that certain asset acquisitions now have to be notified although such acquisitions would normally not have any substantial effect on the market.
The Consultation contains a study undertaken by the CCPC in which it used a set of notional figures (€5m and €10m for individual domestic turnover and €60m for aggregate turnover in the State) to analyse the potential impact on the number of merger notifications received annually by the CCPC. Based on the total number of notifications in 2015 and 2016, the study showed that the number of notifications would significantly reduce if the notional figures set out above were applied.
The Consultation also provides that a higher individual undertaking financial threshold would appear to bring Ireland much more in line with the other European jurisdictions.
While the Consultation does not set out a specific issue with the number of days in which the CCPC has to make a determination on a notified merger or acquisition, it is noted that the concept of "working day" was added in 2014 to replace "day" in Part 3 to take account of weekends and holiday periods and reflect a more widespread use of such terminology across the EU.
There are four questions in total and three of these relate to financial thresholds and the number of days within which the CCPC must issue a determination. The final question is a catch-all type question.
The Consultation asks whether the individual turnover threshold level should be amended and if so, to what level and whether the aggregate turnover threshold level should be amended and if so, to what level. The Consultation states that supporting arguments should be provided for any suggested changes.
The Consultation also asks whether any or all of the "working days" provisions in Part 3 of the Competition Act 2002 should be amended and if so, to what level. The Consultation states that both reference to specific sections and supporting arguments should be provided for any suggested changes.
Finally, the Consultation asks whether (although it is primarily focused on financial thresholds and working days) there are any other issues relating to the merger and acquisition provisions which the respondent wishes to raise.
The deadline for responses to the Consultation is Thursday 30 November 2017.
The full Consultation can be accessed here.