Is it time for Ireland to index-link the thresholds for compulsory merger notifications?

If the parties to a merger or takeover have turnovers (i.e. sales) over the thresholds specified in Irish legislation then the deals must be notified to the Competition and Consumer Protection Commission (CCPC).

Apart from “media” deals which must always be notified irrespective of the turnovers of the parties involved, the current rule in the Competition Act 2002 is that a proposed merger or acquisition must be notified to the CCPC where in the most recent financial year:

• the aggregate turnover in the Irish State (i.e., Ireland) of the undertakings (i.e. businesses) involved is not less than €60m; and
• the turnover in the State of each of 2 or more of the undertakings involved is not less than €10m.

The thresholds have changed only once in two decades. The last change took effect on 1 January 2019. The change in 2019 was due to too many notifications having to be made because of the original thresholds in the Competition Act 2002. So, the change in 2019 had nothing to do with inflation.

Now, in an era of inflation, the thresholds set down in 2019 are effectively falling. It is easier now to reach €60m or €10m than it was five years ago.

Many countries around the world have an automatic annual revision to their thresholds built into their legislation. For example, in the United States of America, the thresholds for notification and the filing fees for notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) are adjusted automatically each January. Canadian merger control law has a similar regime.

The Irish Government should consider the merits of linking merger thresholds in the Competition Act 2002 (and, perhaps, the new Screening of Third Country Transactions Act 2023 as well) to ensure that these statutory thresholds remain synchronised with how the markets are evolving.  Of course, no regime is perfect and the “consumer price index” is not necessarily the best, or only, reference point but it is better than having a set of thresholds frozen in time. (Other reference points could be the various indices used for measuring the size of the Irish economy.) It is worthwhile the Irish Government at least considering amending, in the next revision of the competition statutes, the competition laws to allow for automatic revision.

Please contact Dr Vincent Power or any other member of the EU, Competition and Procurement team if you have any query.

Date published: 24 January 2024