In what has been a busy week for merger control in Ireland, the Irish Competition and Consumer Protection Commission (“CCPC”) announced 5 July 2019 that it had accepted behavioural commitments as a condition of clearing LN-GAIETY’s acquisition of MCD (the company which promotes the Longitude and Vital music festivals in Ireland).
These wide-ranging commitments include a requirement that LN-GAIETY voluntarily notify the CCPC of any below-threshold acquisitions of music festival businesses in Ireland for a period of five years, implement information barriers between it and the acquired business, abide by non-discrimination obligations vis-à-vis other venues and maintain hold-separate obligations with the ticketing operation element of Live Nation, which trades as ‘Ticketmaster’).
The UK Competition and Markets Authority (“CMA”) also announced 11 July its intention to refer the same merger to a Phase 2 investigation as a result of competition concerns relating to the music promotion industry in Northern Ireland, unless clear-cut (ie structural) remedies are offered. It will be particularly interesting to observe how these two processes will now interact.
Separately, the CCPC announced 8 July that it had accepted quasi-structural commitments as a condition of clearing the acquisition by Berendsen Ireland Limited of King’s Laundry Limited, in the form of a divestment of certain contracts relating to specialised cleaning to an up-front buyer. Further, the CCPC requires Berendsen to appoint a Monitoring Trustee to oversee such proposals.
These cases continue a trend of the CCPC accepting extensive behavioural or otherwise novel commitments to ameliorate potentially serious competition concerns and distinguishes Ireland from other jurisdictions (including the UK and EU) where more traditional structural remedies (ie divestiture) continue to be required. Further, the LN-Gaiety/MCD case continues the CCPC’s close scrutiny of vertical mergers and highlights its preference for ring-fencing where it identifies potential foreclosure concerns.
The LN-GAIETY / MCD merger
- LN-GAIETY is a joint venture between Live Nation and Gaiety that runs a number of music festivals and venues in the UK. It is best-known in Ireland for the Electric Picnic music festival. Live Nation also owns Ireland's largest ticketing agent and also owns and operates the 3Arena, operates the Bord Gais Energy Theatre and manages venues, including the Gaiety and Olympia theatres, on behalf of Gaiety.
- MCD promotes live music events in Ireland, including two music festivals (Longitude and Vital).
The Irish Competition and Consumer Protection Commission investigated and cleared the merger on 5 July 2019 subject to commitments.
The commitments offered by LN-GAIETY are wide-ranging and appear designed to ensure that the merger does not harm third party promoters, venues or ticket operators.
They require LN-GAIETY to:
- Inform the CCPC in advance of any proposal to acquire a live music festival (directly or indirectly) for a period of five years, where that acquisition would not otherwise trigger a notification to the CCPC or the European Commission, and to notify voluntarily any such acquisition if requested to do so by the CCPC.
- Maintain information barriers between the LN-GAIETY and MCD businesses to ensure that information received by LN-GAIETY from third party promoters about potential upcoming artists and events is kept confidential and not shared with MCD.
- Ensure that LN-GAIETY and MCD does not refuse (or threaten to refuse) to provide live events to a third party venue (at all, or on less favourable terms than are enjoyed under existing contracts with MCD) because they have or intend to contract with a ticket operator other than Ticketmaster
- Require LN-GAIETY and MCD to contract with Ticketmaster on an arms-length basis for a period of
Comment – continued trend of behavioural or otherwise novel remedies
The commitments required in LN-GAIETY / MCD are complex and wide-ranging, reflecting what the CCPC considered to be significant competition concerns with this merger (although these are not detailed in the CCPC’s public statements). They are likely to be onerous to design, implement and monitor (in particular, the non-discrimination requirement). LN-GAIETY must nominate directors with responsibility for reporting on compliance every 12 months for the next five years.
This case follows previous examples of the CCPC accepting behavioural or otherwise novel commitments as an alternative to divestiture or all-out prohibition.
- In 2018, five mergers resulted in formal commitments, all of which required some form of behavioural remedies (M/18/009 BWG/4 Aces; M/ 18/ 016 – Trinity Mirror/Northern & Shell; M/18/031 Uniphar/SISK Healthcare; M/18/036 – Enva/Rilta; and M/18/042 – Oaktree/ Alanis/ Lioncor (JV).
- In 2017, parties to a proposed merger between media-monitoring companies, falling below the relevant financial thresholds, were required to make a voluntary notification (M/17/02 Kantar Media/NewsAccess).
- Also in 2017, parties to a proposed acquisition of two hotels were required to commit to notify future acquisitions or hotel management agreements even where those fall below the financial thresholds triggering mandatory notification and despite finding no competition concerns with regard to the notified merger (M/17/027 Dalata/Clarion/Clayton).
This continues to distinguish Ireland from other jurisdictions (including the UK and EU) where structural remedies are almost always preferred. It is noteworthy that the UK CMA announced 11 July 2019 that it had decided to refer the same merger (as regards potential impacts on competition in Northern Ireland) to a phase 2 investigation unless appropriate commitments are provided by the Parties. The CMA’s practice, particularly at phase 1, is only to accept clear-cut structural remedies to ameliorate concerns. It will therefore be of interest to see how the Parties will seek to address the CMA’s concerns and how any such commitments under the UK regime will interact with those accepted by the CCPC.