M&A: Ireland's competition agency clears the proposed acquisition of MCD Productions by LN-Gaiety, subject to commitments
M&A: Ireland’s competition agency clears the proposed acquisition of MCD Productions by LN-Gaiety, subject to commitments
On 5 July 2019, Ireland's Competition and Consumer Protection Commission (CCPC) announced that it had cleared the proposed acquisition of sole control of MCD Productions Unlimited Company (MCD) by LN-Gaiety Holdings Limited (LN-Gaiety). This is subject to a number of commitments that will satisfy concerns raised by the CCPC.
The notification process was long. The notification was made on 14 August 2018 and the clearance was announced on 5 July 2019 – 325 days. The process involved both a first phase and a second phase investigation. This case shows that businesses should plan their acquisition timetables, for long review processes in Ireland in the case of transactions which potentially raise competition concerns.
CCPC investigations of mergers and acquisitions are designed to see whether the proposed transaction would substantially lessen competition in any market for goods or services in Ireland. The test in Ireland is a purely competition-based test and does not involve a public interest test.
The notified transaction involved the acquisition of sole control of MCD by LN-Gaiety. The CCPC summarised the parties and background in the following terms:
"LN-Gaiety is a joint venture between Live Nation Music (UK) Limited (Live Nation) and Gaiety Investments Unlimited Company (Gaiety). LN-Gaiety owns and operates a number of live music festivals and venues, primarily in the United Kingdom but also the Electric Picnic live music festival in [Ireland]. MCD promotes live music events in [Ireland] and owns two live music festivals on the island of Ireland, namely Longitude and Vital. Live Nation provides primary ticketing services for live events in [Ireland] through Ticketline Unlimited Company (“Ticketmaster”) and also owns and operates the 3Arena, operates the Bord Gáis Energy Theatre and manages venues, including the Gaiety and Olympia theatres, on behalf of Gaiety."
The CCPC's determination in the case has not yet been published – this usually takes some time. It will be interesting to read the determination in detail when it is eventually published. In the interim, the CCPC has said that it had identified various competition concerns arising from the overlapping activities of Live Nation and MCD in:
the provision of primary ticketing services
the promotion of live events
the operation of live event venues in Ireland
The CCPC said that these concerns included:
the likely impact on competition of future acquisitions of festivals or festival operators
the potential for anti-competitive information sharing
the potential for retaliatory action against independent live event venues because they choose an alternative ticketing services provider
The parties submitted the following proposals to the CCPC which the CCPC accepted:
to inform the CCPC in advance of any proposal to acquire control of a live music festival or a live music festival operator in the State, even if the proposed transaction would not meet the thresholds to be notifiable on a mandatory basis to the CCPC – this is a type of commitment which has been used before and has a value in dealing with future issues;
to take steps to ensure that the identity of artists that independent promoters propose to promote in Ireland, which is disclosed to a venue owned, operated or managed by Live Nation during the booking process for a live event is not directly or indirectly shared between Live Nation and MCD;
not to refuse or threaten to refuse to provide live events to an independent live event venue as a result of that venue choosing to contract with a primary ticketing services provider other than Ticketmaster;
to conduct any contract or other negotiations relating to the supply of primary ticketing services by Ticketmaster to MCD on an “arm’s length” basis. This means MCD and Ticketmaster must each act independently and in its own interest.
The CCPC accepted these commitments as being sufficient to cure any competition concern which the CCPC may have had.
These are behavioural rather than structural remedies. Many competition agencies prefer structural rather than behavioural remedies because they involve less post-transaction supervision and verification. It is interesting to see how behavioural remedies are more acceptable in Ireland than in many other regimes. It will also be important to see how the CCPC proposes to supervise or verify a commitment such as an obligation on the acquirer to conduct any contract or other negotiation relating to the supply of primary ticketing services by Ticketmaster to MCD on an “arm’s length” basis. Presumably, the CCPC would not be present at the negotiations and it will be interesting to see how it will verify compliance.
The CCPC, in announcing its approval of the transaction, said that its approval of the deal and the commitments obtained from the parties are independent of the CCPC’s ongoing investigation into the ticketing sector in the State and without prejudice to any potential action(s) that the CCPC might take in the future.
The determination will be fascinating to see how the CCPC views concentrations involving undertakings which have interconnected activities in a concentrated market but also how the CCPC proposes to verify these behavioural remedies.