On 8 April 2019, the Irish Competition and Consumer Protection Commission ("CCPC") secured for the first time a criminal prosecution for "gun jumping" in a merger control case after Armalou Holdings Limited pleaded guilty to implementing a transaction in contravention of the requirement to first obtain regulatory approval.
In this update, we discuss how the CCPC's action in this case reflects a broader trend among competition authorities in a number of jurisdictions to focus increasingly on compliance with procedural aspects of merger control rules.
The CCPC's investigation of Armalou began in 2017 and related to a suspected failure by Armalou to notify its acquisition of Lillis-O'Donnell Motor Company Limited through its wholly-owned subsidiary, Spirit Ford Limited. Following extensive enquiries by the CCPC, the case was brought before the District Court, which found that Armalou had infringed the Irish merger control rules by carrying out the acquisition without the required prior notification to the CCPC. However, the Court found that Armalou was unaware of its obligations and had not engaged in a wilful breach. In those circumstances, and in light of its guilty plea, Armalou escaped significant sanction and was required only to make a charitable donation of 2,000.
This is well below the maximum potential sanctions that may be imposed under Irish merger control rules, which provide that parties found guilty of failing to make a required notification to the CCPC (or failing to provide information required by the CCPC pursuant to a request for information) may be subject to a fine of up to 250,000 and may also face an additional daily fine of up to 25,000 for each day of non-compliance.
Nevertheless, the case appears to represent a hardening of the CCPC's position on procedural violations. Speaking in the aftermath of the decision, Isolde Goggin, Chairperson of the CCPC, noted:
"Today's hearing is a strong reminder to businesses and legal practitioners, that failing to notify a notifiable transaction is a criminal offence and it is essential that merging parties comply."
The CCPC is not alone in ramping up its focus on "gun jumping". The European Commission ("Commission") decision in April 2018 to impose a124.5 million fine on Altice for early implementation of its acquisition of PT Portugal and the Commission's ongoing investigation into similar activity in relation to Canon's acquisition of Toshiba Medical Systems...