The Competition Act, 2002, provides that mergers “where the world-wide turnover of each of 2 or more of the undertakings involved…is not less than €40m” must be notified to the Competition Authority. The Act also provides for the voluntary notification of mergers involving firms below these turnover thresholds. The merger provisions of the Act came into effect on 1st January 2003.
On 30th September 2003 the Competition Authority issued guidelines in relation to voluntary notification of below the threshold mergers. The guidelines advise firms involved in such a merger “to consider carefully the likely effects on competition of the proposed transaction and, if concerns are raised, to consider the benefits of notifying it to the Authority.” The Authority indicated that, where such mergers are not notified, the Authority may challenge them before the Courts as being in breach of Section 4 and/or 5 of the Competition Act.
The main benefit of notifying such mergers is that mergers that are notified and cleared by the Authority are immunised against challenges under Sections 4 and 5. In contrast, if a merger is not notified, any challenge under section 4 or 5 could result in lengthy court proceedings. Agreements in breach of Section 4 are void. In the case of an abuse of dominance under Section 5, the Authority can request the Court to order the break-up of the dominant position. Presumably the Authority would request the break-up of a merger which it had successfully challenged a merger under Section 5.
Before the Authority published its Notice there were very few voluntary notifications of mergers below the thresholds. This may now change. At the very least the Authority notice suggests that, where the turnover of parties involved in a merger lie below the thresholds for compulsory notification, they will need to carefully consider the potential competition implications in deciding whether or not to notify.
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© Compecon Limited 2003.
Summary of EU and Irish merger control regimes.
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