The Competition (Amendment) Act 2022 – An overview of reforms to Ireland’s merger control regime

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The Competition (Amendment) Act 2022 (the “Act”) was enacted on 29 June 2022. The primary purpose of the Act is to implement the ECN+ Directive (“ECN+”), which ensures that competition authorities National Competition Authorities (“NCAs”) across the EU have similar investigative and enforcement powers.

Some of the most significant reforms introduced by the Act relate to the additional powers of the Irish Competition and Consumer Protection Commission (the “CPCC”) and other Irish NCAs to investigate and sanction parties for anti-competitive behavior, which are covered in a separate briefing here.

This update covers the significant overhaul of Ireland’s merger control regime introduced into law.

Introduction to the Irish merger control regime

Ireland’s merger control regime was first established in 2002 under Part 3 of the Competition Act 2002 (as amended) and has been updated several times since, including in 2014 ( when jurisdictional thresholds were significantly changed) and 2019 (when the financial notification thresholds were increased). The law introduces some of the most significant reforms to date and will significantly increase the powers of the CPCC in merger control.

Main law reforms

Power to order notification of “below threshold” transactions:

The most significant change introduced by the Act is that the SPCC may require parties to notify transactions that do not meet the applicable financial thresholds where the SPCC believes it may have “an effect on competition in markets for goods or services in the State”. This reform includes the following procedural elements:

  • The SPCC must notify the parties in writing that they are required to notify the transaction in question and specify the time period within which they are required to submit the notification (which the parties may request an extension if necessary); and
  • The CCPC must issue such written notice no later than 60 business days after the earliest of the following dates: (i) the date on which one of the parties publicly announces its intention to make a public offer; (ii) the date on which the SPCC becomes aware that the parties have entered into a binding agreement; or (iii) the date on which the transaction is effective.

Power to investigate mergers below threshold in the absence of notification

Parties to a merger or acquisition may choose to voluntarily notify their transaction to the CCPC if it does not meet the applicable financial thresholds. However, if the parties fail to notify a transaction when notified by the CPCC, the CPCC may investigate the transaction on its own initiative on the same basis and with the same powers as for a notified merger.

Provisional measures

The CCPC may impose interim measures with respect to a notified transaction (including those voluntarily notified by the parties) when it deems it necessary to prevent an effect on competition in particular markets. These interim measures may require the parties to refrain from taking steps to implement the transaction (e.g. exchanging competitively sensitive information) or to mitigate the impact of measures already taken for implementation (for example, appointing a person to oversee the performance of certain activities). Failure to comply with the provisional measures imposed may result in criminal prosecution and a fine of up to €250,000 as well as an additional daily fine of up to €25,000 for each day of non-compliance by the party.

Enhanced Remedies Toolkit (including powers to void completed mergers)

Where a merger or acquisition has been implemented without the authorization of the CCPC and, following a full investigation of the transaction, the CCPC determines that it would have the effect of substantially lessening competition in the State, the CCPC may require the parties to resolve or dissolve the transaction and determine how this is to be done. When the transaction cannot be unwound or dissolved, the CCPC will be able to determine the best alternative way by which the parties will be required to restore the status quo before the implementation of the transaction.

Power to initiate summary proceedings for breach

The CCPC may bring an action in summary proceedings before the Tribunal de Grande Instance when: (i) the parties have not notified a merger or acquisition that complies with the applicable financial thresholds; or (ii) the parties have failed to respond to a request for information (“RFI”) issued to them by the SPCC in connection with a notified transaction.

Weapon Jump Offense Update

The CCPC may impose fines on parties who have committed gun-jumping, parties having either: (i) implemented a notifiable merger or acquisition without first notifying the transaction to the CCPC; or (ii) has notified such a transaction but has implemented it before the CCPC has issued a clearance decision authorizing it to do so. Similar to the fines applicable in the event of non-compliance with the interim measures, the parties may incur a fine of up to €250,000 for “jumping weapons” as well as an additional daily fine of up to €25,000 for each day the infringement continues. .

RFI to third parties

In addition to their current power to issue mandatory RFIs to notifying parties, the CCPC will also be able to issue mandatory RFIs to third parties they consider “may have information relevant to the Commission’s review of the merger or acquisition”. The same rights and obligations that currently apply to notifying parties with respect to the RFI process will apply to such third parties, and the CCPC may impose the same sanctions for non-compliance on such third parties (see above).

Impact of merger control reforms

Changes to Ireland’s merger control regime introduced by the Act significantly increase the powers of the CCPC to investigate transactions that do not meet the financial thresholds for mandatory notification and radically revise the position on voluntary notification of transactions below the threshold .

The CCPC may require notification of transactions that do not meet the relevant financial thresholds for mandatory notification simply on the grounds that they may have “an effectabout competition in a market or markets in Ireland. The CCPC will also have the power to investigate mergers completed for an extended period (up to 60 business days) after they have been made effective (or otherwise known).

This very low jurisdictional barrier is likely to create considerable uncertainty for the parties to the concentration, including for international transactions which may have an effect on competition in Ireland. To date, the CCPC has not issued guidance on how and when these powers will be applied in practice.

In addition to the significant jurisdictional changes introduced, the Act gives the SPCC a greatly enhanced toolbox with which to impose interim measures and remedies to resolve competition concerns, as well as the ability to compel third parties who are not directly involved in a merger to respond to requests for information. . The law also gives the CCPC the ability to impose civil fines for “use of firearms” and to initiate summary proceedings for other offenses in the district court on the CCPC’s own motion ( instead of relying on the Director of Public Prosecutions to do so).

As regards the long-term impact of these reforms on the Irish merger control regime, it seems clear that companies contemplating entering into a merger or acquisition with another party will need to carry out a detailed analysis not only to determine whether the transaction would meet the financial thresholds applicable in Ireland, but also whether it could otherwise be considered to have an effect on competition in a particular market or markets in Ireland. In addition, the parties to a possible merger or acquisition will have to pay particular attention to the procedural aspects of notification and implementation of such an operation, since any breach of these requirements could result in significant penalties.

The entire law is expected to enter into force by ministerial decree in the fall of 2022.

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