COVID-19: Impact on Merger ControlMonday, 23 March 2020
Ireland’s Competition and Consumer Protection Commission (CCPC) has announced that as of 18 March 2020 it is encouraging parties to transactions which are notifiable to it to delay their merger filings where possible until further notice in light of the outbreak of COVID-19 in Ireland and the government restrictions which have been put in place.
The CCPC has identified its likely difficulties in collecting information from third parties such as customers, competitors and suppliers as part of its investigations as the reason for encouraging delayed notifications. The CCPC’s announcement and its rationale is in line with the European Commission’s approach to transactions notifiable under the EU Merger Regulation, which it announced on 12 March 2020.
The practical effect of this measure is to delay the implementation of transactions that are mandatorily notifiable to the CCPC under the Competition Acts 2002 to 2017. Despite the CCPC’s announcement, parties remain under an obligation not to implement a notifiable transaction until the CCPC makes a determination, or the statutory time limit for reaching a determination has passed without the CCPC having done so. If the parties put the transaction into effect before this time, it is deemed void under Irish law and criminal penalties may apply.
A total of eight (8) transactions have been notified to the CCPC to date in 2020, which is slightly higher than the rate of notifications compared to this time in 2019. However, the outbreak of COVID-19 in Ireland and this procedural measure will certainly slow down the pace of larger M&A deals in Ireland through Q2 and perhaps beyond.
Where delay is not possible for the parties
Despite the CCPC’s announcement, parties are still permitted to file mandatory merger notifications with the CCPC without delay where it is not possible commercially to delay the closing of a transaction. Such a situation would likely arise where there are significant negative commercial consequences for the parties, such as an impeding long stop date. The CCPC is establishing a temporary electronic process to facilitate the filing of notification forms and all supporting documentation to facilitate this.
Any transactions notified to the CCPC at this time will still be subject to the usual procedural rules and statutory timelines, and the CCPC has no discretion to alter these. As part of its initial Phase 1 investigation, the CCPC has 30 working days to either clear the transaction or open a Phase II investigation. In a Phase II investigation, the CCPC generally has 120 working days to (i) clear the transaction, (ii) clear it subject to conditions, or (iii) block the transaction. These statutory timelines can be extended by 15 days if the parties offer remedy proposals to overcome competition concerns, or be reset entirely by the CCPC where it issues a formal Requirement for Information (RFI).
However, notifying parties should be advised that, in practice, merger notifications are unlikely to be processed with the same efficiently as normal. If the parties insist on filing, it is possible that the CCPC could declare filings incomplete or issue a formal RFI in the event that it is having difficulty in concluding an investigation within the statutory timeline.
A positive development is that for the moment the CCPC are accepting electronic copies of notifications and will not require hard copies.
Please note that the content of this summary does not amount to professional advice. Legal and tax advice should be sought in respect of specific queries. The COVID-19 situation is evolving rapidly and this update is provided on the basis of information available as at 23 March 2020.