Politics and the application of competition law in Ireland
Politics and the application of competition law in Ireland
It has already been an eventful year for competition regulators given the growing political involvement and wider geo-political effects of transactions (as well as business practices).
The recent political reaction to the prohibition of the Siemens/Alstom merger by the European Commission (Commission) has been marked. In addition to that, there have already been calls from certain political quarters to change how mergers are assessed under the EU Merger Regulation. These calls include a suggested role for national governments to be involved in the merger control assessment process. Wider competition (and antitrust) law enforcement has also faced recent political debate (including in the EU and the US). Closely associated with this has been the rapid evolution of technology and the reaction to significant competition law investigations and decisions affecting global Big Tech companies.
In Ireland, the importance of the application of Irish competition law has frequently prompted Irish political interest, in both the shape of Irish competition legislation and in relation to certain goods and services (e.g. grocery goods and media). Under Irish competition legislation, the Government of Ireland (Government) has a potentially active role in the application of competition law in Ireland.
The Competition and Consumer Protection Commission (CCPC) is "independent in the performance of its functions" as stated in the Competition and Consumer Protection Act 2014 (CCP Act). However, there are certain features of competition law in Ireland which mean that the Government plays a role. For example, in the appointment of "Members" (i.e. senior management) of the CCPC and the drafting of competition law legislation. A recent example of this includes the Competition (Amendment) Act 2017, which amended the Competition Act 2002 (as amended) (CompetitionAct) to provide that the prohibition on anti-competitive agreements under domestic Irish competition law, does not apply to collective bargaining and agreements regarding certain self-employed workers. This note however focuses on the CCPC's main competition law functions and the potential role of the Government.
Merger control in Ireland
Subject to the overriding application of the EU Merger Regulation, a merger must be notified to the CCPC if it meets the thresholds under the Act. This means that all undertakings involved have aggregate turnover in Ireland of at least €60m and each of at least two of the undertakings involved have turnover in Ireland of at least €10m. Only the CCPC can then decide whether the notified merger should be approved (whether based on commitments or conditions) or should be blocked.
The substantive competition law test for the parties to a merger is to persuade the CCPC that the merger would not substantially lessen competition (SLC) in any market in Ireland. There is no role for the Government in the decisions made by the CCPC on notified mergers. The Government (like any third party) could submit comments on a notified merger but in theory it might be possible for the Government to issue certain directions to the CCPC on the performance of the CCPC's merger control functions other than the CCPC's decision-making role – see below.
There are currently no proposed changes to the Irish merger control rules to take into account value of transaction mergers (as recently under German merger control) or national security concerns (as recently under UK merger control). There are no Irish merger control rules regarding the Irish national interest or any exceptions to promote "national champions".
An important exception in relation to decision-making is in relation to media mergers. A media merger, must be notified first to the CCPC for review by reference to the SLC test (subject to the overriding application of the EU Merger Regulation) and then, if the CCPC (or where applicable the Commission) approves it, to the Minister for Communications, Climate Action and Environment (CommunicationsMinister) under the Competition Act to determine whether it would adversely affect media plurality in Ireland. This test incorporates elements of competition analysis but is primarily based on whether there would be an adverse effect on media diversity in Ireland. So far, the Communications Minister has not blocked a media merger.
Competition law policy and enforcement in Ireland
One of the functions of the CCPC is to investigate anti-competitive behaviour in Ireland under both EU and Irish competition law. While the CCPC cannot make any finding of a breach of either EU or Irish competition law and cannot impose any fines (implementation in Ireland of the ECN+ Directive might eventually change this), it can enforce competition law (e.g. carry-out dawn raids, seek reliefs from the Irish Courts), operate the cartel immunity programme, investigate anti-competitive practices, assess complaints and carry-out studies. Recently, the CCPC has been involved in a number of competition law investigations in the motor insurance, bagged cement and ticketing sectors, as well as carrying-out a competition study on the domestic waste collection market in Ireland.
In terms of the main areas of potential political involvement in competition policy and enforcement in Ireland, the CCPC must (under the CCP Act) when requested or directed by the Minister for Business, Enterprise and Innovation (Minister):
advise and make any recommendations to the Government, the Minister, any other Minister of the Government, any Minister of State, any public body or certain any other prescribed bodies
advise and make any recommendations to the Government, the Minister, any other Minister of the Government or any Minister of State in relation to any proposals for legislative change, or any other policy matters, concerning competition
submit to the Minister, any other Minister of the Government or any Minister of State any proposals it considers appropriate to amend any Act, or for new Acts, concerning competition after consultation with persons that the CCPC considers appropriate
carry out a study or analysis of any practice or method of competition affecting goods or services, or any other matter relating to competition, and submit a report to the Minister
undertake reviews of competition law legislation and assist in the preparation of draft legislation
Most recently, following a request by the Minister, the CCPC conducted a market study and issued a report into the operation of the household waste collection market in Ireland which included extensive recommendations about the future regulation of that market.
One aspect of the CCP Act raises potential issues regarding the independence of the CCPC. Under the CCP Act, the Minister may, "in relation to the performance by the [CCPC] of certain its functions", give a direction in writing to the CCPC "requiring it to comply with such policies of the Government as are specified in the direction" (Direction). In doing so, the Minister is required to lay a copy of such a Direction before each House of the Oireachtas (i.e. the Irish Parliament). The CCPC must comply with any such Direction. There is no clarification on what is meant by requiring the CCPC to comply with policies of the Government under a Direction and therefore this could be interpreted extensively. The Directions do not apply to the making of "declarations by the CCPC" (i.e. domestic Irish competition law equivalents of EU Block Exemptions), making determinations on notified mergers under the Competition Act, "the initiation" of competition law (and merger control) enforcement proceedings or carrying out a competition law investigation.
Though yet to be exercised in practice since 2014, this potential involvement of the Minister (and therefore the Government) is wide (despite the exceptions). For example, the Minister could make Directions about the way in which the CCPC carries out its merger review process, the post-initiation performance of CCPC enforcement proceedings and market studies if required in light of "the policies of the Government". It is possible for example that any adverse future effects of Brexit on markets in Ireland will prompt the Government to engage the CCPC to look at how competition works in Ireland and possibly become more involved in the functions of the CCPC.
There are currently no proposals in Ireland to copy the recent changes to German and UK merger control or anything similar to the proposed changes to the EU Merger Regulation in light of the recent Siemens/Alstom prohibition by the Commission. However, the Government has a central role to play in relation to media mergers in Ireland and also has extensive powers to direct the CCPC to advise the Government on competition as well as to undertake market studies. In addition, the Government has a wide power to issue Directions to the CCPC in relation to the performance of a potentially wide range of the CCPC's competition law functions.