31 October 2015 marks the first birthday of the Competition and Consumer Protection Commission ("CCPC") which was created under the Competition and Consumer Protection Act, 2014 ("2014 Act"). Over the past twelve months, the CCPC has overseen major changes to Irish competition law and practice. This update reviews ten developments in the CCPC's work that impact on companies doing business in Ireland.
Mergers: a heavier regulatory burden
More mergers must be notified and to what benefit?
New lower thresholds under the 2014 Act - requiring Irish turnover of 50m in aggregate and 3m by each of two parties - have led to a large increase in the number of merger filings to the CCPC (over 80%).
This rise in notifications is largely because the lower thresholds now capture smaller deals. No significant competition concern was identified in these smaller transactions, which is troubling because increased regulatory costs are being placed on businesses and on the CCPC's limited resources. This was always a risk because the new thresholds were not subject to prior public consultation or a Regulatory Impact Assessment.
The effect of the new thresholds in making small acquisitions by large players subject to review may enable the CCPC to 'sharpen its axe' in advance of major mergers involving the same large players. For example, in early 2015 the CCPC reviewed three acquisitions by Paddy Power of six or less local betting offices and in late 2015 the CCPC is now reviewing the Paddy Power / Betfair merger. Time will tell whether the CCPC will harness this possible regulatory advantage.
Merger review is taking longer
The 2014 Act increased the permissible time limit for the CCPC to examine a Phase I merger from one month to 30 working days. While the stated purpose of this change was to align Ireland with the EU approach of counting working days, its introduction has resulted in a considerable slow-down in the average Phase I timetable - from around 19 working days in 2013/14 to around 23 working days under the new regime.
Merger reviews have also been lengthened by the use of formal information requests by the CCPC, as described below.
Greater use of CCPC's 'stop the clock' powers
The CCPC has used its power to 'stop and re-start the clock' on the statutory review period by requesting information from merger parties in four cases under the new regime: Liberty Global / TV3, Pat the Baker / Irish Pride, Topaz / Esso and Baxter / Fannin Compounding. The latter two cases also moved to Phase II.
Thus, some mergers are spending double the standard period in Phase I without the CCPC having articulated any competition...