Authority investigates 30 mergers

The Competition Authority has investigated a number of mergers this year that it believed were potentially anti-competitive, but which fell below the threshold for notification to the authority.

Companies are obliged to inform the authority of merger or takeover plans if the parties involved have a worldwide turnover of €40 million or more, and are doing business anywhere on the island of Ireland.

But the Competition Authority has the power to investigate deals where the parties' turnovers fall below this figure, if it believes the transaction is potentially anti-competitive.

In this situation it can unwind the merger and seek the prosecution of anyone involved in any anti-competitive activities.

It can also prevent any deal of which it becomes aware from being closed if it believes that there may be competition issues at stake.

Since the beginning of the year, the authority has reviewed 30 deals between companies.

Its mergers division director, Mr Ted Henneberry, yesterday said the authority had "undertaken investigations" of a number of transactions that fell below the threshold, but that it felt raised competition issues.

No action was taken as a result of these inquiries and the deals were given the all-clear.

A new regime giving the authority more powers to tackle cartelism and anti-competitive behaviour came into effect at the beginning of the year, when the Competition Act 2002 came into force.

Under the Act, it took over direct responsibility for investigating mergers; previously, the Minister for Enterprise, Trade and Employment had to refer a deal to the authority for review. The Act sets the €40 million turnover threshold for notification.

Mr Henneberry said the watchdog may seek to have that figure changed, and said the agency was looking at the likely options.

"We are looking for views, we are looking for input to see if there are better ways of capturing those that are falling through the gaps," he said.

The authority yesterday issued a notice outlining how companies whose deals fall below the notification threshold, but which may raise competition issues, can voluntarily notify it of their intentions.

Mr Henneberry explained that voluntary notification gave protection against investigation.

He also pointed out that it meant the businesses involved could be certain of their legal position during the transaction.

Earlier this year, Smurfit Press and Lithographic Universal voluntarily notified the authority of their intention to merge.

The companies had a combined turnover of €35 million, well below the notification threshold. Mr Henneberry said the authority cleared the agreement, which was closed at the end of May.

The authority will hold a mergers review day in Croke Park, Dublin, next Friday, October 10th. Speakers will include the EU's director general of competition, Mr Philip Lowe, and the Competition Authority's chairman, Dr John Fingleton.