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What Does an Irish Phase 2 Look Like in 2019?

AUTHORs: Kate McKenna DATE: 31/07/2019

In July 2019, the Competition and Consumer Protection Commission (the “CCPC”) concluded two Phase 2 reviews, issuing clearances subject to remedies in both cases.

 This article considers what parties to potential Phase 2 Irish merger control cases should expect in future (in terms of length and issues), based on these cases.

Irish Phase 2 Determinations Are Taking Longer

In Phase 2 cases the CCPC must make a final determination within a review period of 120 working days (or 135 working days where the parties offer remedies in Phase 1) from notification.   It can take much longer to obtain a final determination, however, as the ‘clock stops’ / time is not counted when the CCPC issues statutory requests for information (RFI).

The recent Phase 2 determinations were the most longest-awaited CCPC determinations ever, by some measure, being made:

  • Approximately 226 working days following notification in the case of LN-Gaiety Holdings Limited’s acquisition of MCD Productions Unlimited Company (the “MCD Merger”); and
  • Approximately 232 working days following notification in the case of Berendsen’s acquisition of Kings Laundry (the “Kings Laundry Merger”).

It is not obvious that the longer timelines in the above mergers, as compared to the previous two Phase 2 cases (Enva/Rilta & Trinity Mirror/Northern & Shell), can be fully explained by the above  mergers raising significantly more complex competition issues.  After all, both of the above mergers were ultimately cleared without traditional structural remedies being required (noting that one of the remedies in the Kings Laundry Merger was a quasi-structural remedy to sell contracts (but no assets)).

Behavioural Remedies Are Still In Fashion at the CCPC

As Matheson has discussed in previous articles, including an article on the MCD Merger, the CCPC uses behavioural commitments far more often than other European competition authorities.  Behavioural-type remedies were obtained in both the MCD Merger and the Kings Laundry Merger. 

The commitments offered in the MCD Merger were wide-ranging and appear designed to ensure that the merger does not harm third party promoters, venues or ticket operators.  They required 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.

The commitments offered by Berendsen Ireland Limited involved the divestment of certain contracts relating to specialised cleaning to an up-front buyer and the appointment of a Monitoring Trustee to oversee such arrangements.

Overall, parties to potential Phase 2 cases should expect a long waiting period and behavioural remedies including confidentiality, voluntary merger notification and ex ante regulation-type controls on customer pricing and other terms and conditions.