Recap

1. COVID-19 – Merger reviews move online
   There are few areas of life that have remained untouched by the COVID-19 outbreak and merger control is no exception. Similar to the European Commission, the UK Competition and Markets Authority and other competition regulators around Europe, the Competition and Consumer Protection Commission (“CCPC”) was quick to implement temporary measures to ensure business continuity in merger review processes, with CCPC staff working remotely and merger filings being submitted electronically since mid-March. The move online has been smooth and has successfully mitigated the impact of the pandemic on CCPC reviews.
2. M&A activity on lockdown
   As of 30 June 2020, 18 transactions had been notified to the CCPC for review in this calendar year.  If this trend were to continue for the remainder of the year, the CCPC would be on course for its quietest year since 2012. This largely reflects the position at a global level where the COVID-19 crisis has caused a sharp slowdown in dealmaking activity, which may continue until such time as the outbreak is under control. However, it will be interesting to see whether there might be an uptick in M&A activity later in the year as firms with a solid capital buffer may look to pick up distressed assets at a reduced price.
3. Gun jumping still high on the agenda
   In 2019, the CCPC secured its first criminal prosecutions for “gun jumping”. Those cases were a clear signal that the CCPC was likely to continue to actively enforce this aspect of the merger control rules in future (see our previous publication on this topic here). Consistent with this focus, the CCPC announced in January 2020 that the proposed acquisition by DMG Media Limited of JPIMedia Publications Limited had been implemented before clearance was received and was therefore void.  This case serves as a further reminder of the importance of complying with the procedural rules in merger cases.

Developments

1. The CCPC’s simplified procedure
   On 1 July 2020, the CCPC’s simplified merger notification procedure officially commenced. The simplified procedure is available in respect of certain types of transactions notified to the CCPC that do not raise competition concerns and requires the provision of less detailed information than is ordinarily the case under the standard procedure. The CCPC considers that the simplified will have a number of benefits, including shorter review periods. However, some concerns have been raised around the possibility of the CCPC reverting to the standard merger procedure in certain circumstances, thus re-starting the clock on its review and requiring full information to be provided. It will therefore be interesting to see how the simplified procedure beds in and whether, in practice, it will result in shorter review timeframes for notifying parties. Early indications from the first case to be reviewed under the simplified procedure (on which we advised) are that it is working well with the CCPC issuing its determination within 17 working days of the date of notification, which is well in advance of the CCPC’s 30 working day statutory deadline to issue a determination.
2. Foreign direct investment to be locked down?
   The coronavirus pandemic and related public health measures have had significant negative consequences for the European economy in recent months. Amidst the downturn, there have been strong calls from the European Commission for a robust EU-wide approach to the review of foreign investment with a view to protecting European businesses in a time of extreme economic vulnerability. In particular, the European Commission has referenced the importance of the EU FDI Regulation[1], urging EU Member States to make full use of existing national foreign investment screening mechanisms, and appealing to EU Member States without such regimes, such as Ireland, to establish similar mechanisms. In order to assess the need for a specific screening mechanism in Ireland,[2] the Department for Business, Enterprise and Innovation (“DBEI”) recently held a public consultation on the implementation of the regulation. While there is some pressure at EU level for Member States to enhance or introduce FDI screening mechanisms, Irish government policy over many years has been to support an open economy and make Ireland an attractive place in which to invest and it remains to be seen whether there will be any major change in approach in this area.
3. Failing firm defence on the rise?
   As the economic fallout from the coronavirus outbreak becomes clear with many businesses struggling to keep their doors open, there has been some speculation that the “failing firm” defence may become more prevalent in competition authorities’ merger control analysis. In effect, this involves arguing that a target business would have inevitably exited the market in the absence of a transaction, and therefore that any harm to customers from allowing the target to exit the market would be greater than any potential harm from allowing the transaction to proceed. While competition regulators around Europe have been clear that the “failing firm” defence will not provide carte blanche to waive through problematic mergers, the pandemic may create conditions in which the defence may be raised.