In December 2013, the Competition Authority issued revised Merger Guidelines, replacing the previous guidelines issued in 2002. The revised Guidelines reflect the Authority’s experience of reviewing approximately 600 mergers since 2002 as well as developments in merger control in other jurisdictions, in particular the EU.
Key changes in the revised Guidelines include:
- Less emphasis on market definition
- Alignment of the Authority’s approach to Herfindahl-Hirschman Index thresholds with that of the European Commission
- A new discussion of the role of market shares in the Authority’s analysis although no indications are given of a market share level below which a transaction is unlikely to give rise to competition concerns
- An expanded discussion of entry and barriers to entry. Whilst the 2002 Guidelines stated definitively that entry is considered timely only if it would occur in two years, the position of the revised Guidelines is more nuanced: “While entry that is effective in two years is normally considered timely, the appropriate timeframe for effective new entry will depend on the characteristics and dynamics of the market under consideration”
- A new detailed section on countervailing buyer power
- An extensively redrafted section on efficiencies again aligned with the approach of the European Commission
It would have been helpful had the Authority illustrated points in the revised Guidelines by reference to its previous cases or by the use of hypothetical examples. Nonetheless, the revised Guidelines provide useful clarification of the Authority’s practice. Now that the Authority has provided greater detail on its approach to substantive merger analysis, it is hoped that it will turn its attention to jurisdictional issues. The Authority has issued some jurisdictional guidance, however, there are numerous issues which remain unaddressed.