Notification and clearance timetableFiling formalities
What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?
A filing must be submitted to the Competition and Consumer Protection Commission (CCPC) prior to the implementation of the merger, and may be made so long as the undertakings involved demonstrate a good faith intention to conclude an agreement. This approach is in line with the European Commission’s practice under Council Regulation (EC) No. 139/2004.
Under sections 18(9) and 18(10) of the Competition Acts 2002 to 2017 (the Act), as amended by the Competition (Amendment) Act 2017, failure to notify a merger that meets the turnover thresholds is a criminal offence punishable by fines of up to €250,000, plus €25,000 per day for a continued breach. The CCPC cannot impose administrative fines but must refer the matter to the Director for Public Prosecutions to initiate either summary prosecution or prosecution on indictment.
Liability attaches to the undertaking required to make the notification, or the person in control of that undertaking. Section 18(11) of the Act provides that the ‘person in control’ of an undertaking is:
- in the case of a body corporate, any officer of the body corporate who knowingly and wilfully authorises or permits the contravention;
- in the case of a partnership, each partner who knowingly and wilfully authorises or permits the contravention; or
- in the case of any other form of undertaking, any individual in control of that undertaking who knowingly and wilfully authorises or permits the contravention.
Following a CCPC investigation, on 8 April 2019, Armalou Holdings Limited (Armalou) pleaded guilty in the Dublin Metropolitan District Court to a breach of section 18. Armalou pleaded guilty to six charges arising from its failure to notify the CCPC of its acquisition of Lillis-O’Donnell Motor Company Limited in December 2015.
Subsequently, on 10 May 2019, Airfield Villas Limited (formerly known as Lillis-O’Donnell Holdings Limited) also pleaded guilty to six charges arising out of its failure to notify the CCPC of the same transaction. This was Ireland’s first criminal prosecution involving gun jumping. In both cases, the District Court decided to apply the Probation Act 1907 on condition that each company made a charitable donation of €2,000 and pay a contribution of €2,070 towards the legal costs of the Director of Public Prosecutions and the CCPC’s witness expenses.
Which parties are responsible for filing and are filing fees required?
Each undertaking involved in the merger must submit a merger filing. In practice, joint filings are submitted, and the purchaser tends to lead on drafting the filing. A filing fee of €8,000 (for each filing) currently applies.
What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?
A Phase I clearance determination must be issued by the CCPC within 30 working days of the ‘appropriate date’, which means the date on which a full and complete filing by the merging parties is made, unless either the CCPC has used its power to ‘stop and restart the clock’ by issuing a formal requirement for information (RFI), which has the effect of resetting the clock, and it only restarts when the RFI is complied with, or where the parties and the CCPC are negotiating remedies, in which case the Phase I period is extended to 45 working days. The CCPC also issues ‘informal’ requests for information that do not stop and restart the clock.
A Phase II clearance determination must be issued by the CCPC within 120 working days of the appropriate date. If the CCPC issues a formal RFI in the first 30 working days of the Phase II period, this has the effect of stopping and restarting the clock in the same way as at Phase I. If the parties and the CCPC are negotiating remedies, the Phase II period is extended to 135 working days.
Media mergers are subject to the waiting periods for notification.
A suspensory obligation is included in the Act. Section 19(1) of the Act imposes a prohibition on the merging parties putting a merger that has been notified (both mandatory and voluntary) into effect prior to the issue of a clearance determination.Pre-clearance closing
What are the possible sanctions involved in closing or integrating the activities of the merging businesses before clearance and are they applied in practice?
Section 19(1) of the Act prohibits the putting into effect of a notifiable merger until the CCPC has reached a determination that it may be put into effect.
In M/16/013 INM/Greer, Independent News & Media (INM) completed the acquisition of assets of Greer Publications prior to notification in breach of section 19(1) of the Act. The CCPC accepted the notification on the basis that INM would not, prior to receiving CCPC clearance, combine or change the structure of the target assets, integrate any retailing or advertising functions of the target assets into INM, cross-sell advertising space between INM and the target assets or share commercially sensitive information between INM and the target assets. The CCPC subsequently cleared the merger.
Section 19(2) of the Act provides that a notifiable merger that is notified to the CCPC, but put into effect prior to a clearance determination, is void. The Act does not state whether a merger that is completed prior to clearance is rendered void for all time, or merely until such time as the CCPC issues a clearance determination. The CCPC has previously expressed the view that a notifiable merger completed without notification remains void until the date of a clearance determination (M/04/003 Radio 2000/Newstalk 106).
Completing after notification but prior to clearance (ie, where clearance is ultimately given) is not a criminal offence.
While the CCPC has permitted the parties to submit a late notification of a completed merger, it has released statements that parties have breached the Act by closing before clearance. For example, in M/10/043 Stena/DFDS, the merging parties completed the merger prior to notification and the CCPC issued a press release stating that the parties had infringed section 19(1) of the Act, and therefore that the implementation of the acquisition was void under section 19(2).
Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?
The same legal rules apply to all cases involving closing before clearance, regardless of whether or not the transaction is a foreign-to-foreign merger.
What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?
No formal guidance has been published by the CCPC on whether structures such as hold-separate undertakings might enable parties to avoid a legal breach of the suspensory obligation under section 19(1) of the Act. In general, we would expect the CCPC to follow the same approach as the Commission with regard to its approach to carve-outs or close-arounds.
Where such mechanisms have been used in Ireland, the CCPC has publicly criticised the merging parties for doing so. In M/12/031 Top Snacks/KP Snacks, the CCPC stated in its determination that the Act does not permit the partial implementation of a merger or acquisition even where a ‘framework agreement’ or other kind of hold-separate arrangement is put in place with regard to certain parts of the business within the state.
The CCPC might be less likely to initiate court proceedings for breach of section 19(1) or section 19(2) in cases where the Irish businesses of the merging parties were being held separate pending the grant of clearance by the CCPC. In M/16/013 INM/Greer, the CCPC accepted the notification of the merger after completion on assurances from INM that it would not, prior to receiving the CCPC’s determination, integrate the relevant target assets into its business. Parties should seek legal advice on a case-by-case basis and consider engaging with the CCPC in pre-notification discussions.Public takeovers
Are there any special merger control rules applicable to public takeover bids?
Section 18(1A) of the Act provides that, where the turnover thresholds are met, the making of a public bid may be notified by any of the undertakings involved to the CCPC once one of the undertakings involved has publicly announced an intention to make a public bid or a public bid is made but not yet accepted.Documentation
What is the level of detail required in the preparation of a filing, and are there sanctions for supplying wrong or missing information?
There is a standard form for notifying the CCPC. All parts of the notification form must be completed, unless a conditional approval has been granted by the CCPC in pre-notification discussions. For example, where there is no overlap between the parties’ activities, it is usual practice to request an exemption from completing some or all of section 4 of the form, which requires a description of the conditions of competition in relation to all markets where there is a horizontal or a vertical overlap.
No market share threshold applies for the identification of overlaps.
The form requests details of the proposed merger, the parties involved, the overlapping products or services, any ancillary restraints and copies of any non-privileged competition assessments of the merger. The Act requires ‘full details’ of the proposed merger to be notified to the CCPC.
In terms of media mergers, a notification form and guidelines have been issued by the Department of Communications, Climate Action and Environment. The content required in the merger notification form includes a description of the proposed merger, and significant details on the undertakings involved. Market share details (both pre and post-merger) are required for each media business of the undertakings involved, in terms of readership, listenership, viewership and page impression hits.
The undertakings involved must submit detail on compliance with industry codes of practice, relevant regulatory bodies and applicable legislation. Detail is also required on grievance procedures for employees, and employment tribunal proceedings involving employees. The notification form states that an undertaking’s record in respect of industrial relations and Labour Court rulings may be examined as part of the assessment.
The undertakings involved must provide information on the ‘editorial ethos’ of each media business, including data on editorial control, editorial structure and positions taken regarding political endorsements and issues of debate or controversy. A breakdown of content for each media business is also required as well as details of any future plans of the undertakings; for example, whether the undertakings to be acquired will continue as separate enterprises (eg, a newspaper and a radio station) and whether there will be changes to editorial and key content-producing staff.Investigation phases and timetable
What are the typical steps and different phases of the investigation?Pre-notification
- Request conditional approval not to complete the entire notification form (where no overlaps); and
- meeting or conference call to discuss the proposed merger (for difficult cases, expedited cases or requests only).
- Submit filing to the CCPC (no hard copy filing is required post December 2021, and parties now submit an electronic copy of the merger notification form);
- publication of notice on the CCPC’s website within seven days recording fact of filing and parties’ names with a call for submissions or comments from third parties (generally a 10-day period);
- possibility of a formal requirement for information that stops and, when complied with to CCPC’s satisfaction, restarts the Phase I timetable;
- possibility of an informal request for information that does not impact on the Phase I timetable;
- discussion of remedy proposals from the parties (if applicable), which extends the Phase I period to 45 working days;
- notice to parties of determination (clearance, conditional clearance or Phase II; with press release for noteworthy mergers);
- merging parties may request redactions from the public version of the determination; and
- publication of Phase I determination within 60 working days of date of adoption.
- Communication from the CCPC setting out its decision to move to Phase II giving limited details;
- call for submissions or comments from third parties;
- possibility of a formal requirement or informal request for information;
- the CCPC may commission a market survey or economic analysis from consultants;
- meeting between the parties and the CCPC (optional);
- early determination approving the merger can be issued within 40 working days of the beginning of Phase II (rather than 120 working days from notification; this is the usual Phase II outcome) or if the investigation is to progress, the CCPC sends the parties an assessment setting out its concerns about the merger;
- oral hearing (if requested within five working days of receipt of the CCPC’s assessment);
- access to the CCPC’s file;
- discussion of remedy proposals from the parties (no later than 15 working days after receipt of the CCPC’s assessment);
- market testing of remedy proposals of parties (depending on circumstances and at the discretion of the CCPC);
- notice to parties of determination (clearance, conditional clearance or blocking) and press release;
- merging parties may request redactions from the public version of the determination; and
- publication of Phase II determination within 60 working days of date of adoption.
What is the statutory timetable for clearance? Can it be speeded up?
The CCPC has a period of 30 working days in which to decide whether to grant a Phase I clearance, and a period of 120 working days in which to decide whether to grant a Phase II clearance.
The Act does not provide for an accelerated investigation, and there is no guidance issued by the CCPC on this point; however, in practice, merging parties can request an accelerated investigation and the CCPC has issued expedited clearance decisions in cases not raising competition concerns. For example, M/12/029 Endless/VION was cleared in 11 days, and in cases that involved strict insolvency procedure timetables, such as M/09/002 HMV Ireland/Zavvi, the clearance determination was issued in nine days. More recently, in M/16/053 Anchorage Capital/Eircom, the CCPC cleared that ‘no issues’ merger in 11 days.
The CCPC can reduce the normal period of 10 days allowed for public comment after publication of notice of a merger notification on its website in individual cases, if circumstances so require. For example, in M/12/048 Endless/Imtech Suir, the notification period was reduced from 10 days to five days where Imtech Suir’s parent company had been declared insolvent, and consequently Imtech Suir was in financial jeopardy and unlikely to operate as a going concern. In that case, the CCPC issued a clearance determination in six days.