1. Competition Law Association What do I need to know about Competition Law in Ireland and what can we learn from 20 years of its operation?
Dr Vincent Power, Partner
A&L Goodbody
25 February 2010

2. Outline of the Presentation
Task is to brief you on competition law in Ireland
An overview of competition law and practice
Irish regime
Anti-competitive practices
Mergers and acquisitions
Case law
What have been the interesting cases and lessons
from the two decades?

3. Why Ireland?
Ireland has been connected with some interesting competition cases…
United Brands
Magill
HB/Mars
Holyhead I and II as well as Roscoff
Charleroi
Ryanair/Aer Lingus
Irish Beef
Some pending State Aid decisions in the financial services sector
33 convictions, first jury conviction in Europe for cartels, first jail sentences and some interesting civil cases

4. Ireland, like England & Wales, is a common law jurisdiction in the EU
Introduction
Ireland, like England & Wales, is a common law jurisdiction in the EU
Traditional approach to competition law issues but changes in the late 1980s/early 1990s
First Regime: Competition Act 1991 and Competition (Amendment) Act 1996
Second Regime: Competition Act 2002 and Competition (Amendment) Act 2006
Other legislation already in place and new legislation on the way
Mixture of successes and failures
Ireland is a little different!

5. Competition Act 1991 Introduction
Establishment of the Competition Authority
Privatisation of Enforcement: Private Actions
Competition Authority was not given the power to impose fines but could take civil cases (but no dawn raid powers)
Competition law breaches were civil but not criminal wrongs
Merger control was still a Ministerial decision but mergers could be supervised under the Mergers Acts and the Competition Act
Notification regime for arrangements

6. Competition (Amendment) Act 1996
Introduction
Competition (Amendment) Act 1996
Public Enforcement of Competition Law
Criminalisation of Breaches
Competition Authority still not given the power to dawn raid and impose fines
Prosecutions had to be taken in court
Evidential and enforcement difficulties

7. Competition (Amendment) Act 2006
Introduction
Competition Act 2002
The Acts were not working
Abolition of notifications – “washing clean linen in public”
Criminalisation of breaches of EU competition law
Before the 2002 Act, merger control was still a Ministerial decision but mergers could be supervised under the Mergers Acts and the Competition Acts (risk of divergence)
Evidential presumptions put in place
Competition (Amendment) Act 2006
Grocery sector

8. Competition Authority
Irish Regime
Competition Authority
Focused entirely on competition law
Does not have the power to impose fines – so extra rigour required for court cases to succeed (not just review of decisions)
Anti-competitive arrangements
Abuse of dominance
Concentration control
Studies and advocacy
Courts
Extremely important
Economists
Juries
No CAT

9. Anti-Competitive Arrangements
Irish Regime
Anti-Competitive Arrangements
Civil breaches
Criminal breaches
A breach of Art.101 TFEU is a criminal offence under Irish law
Imprisonment for up to five years and/or fines of €4m/10% of worldwide turnover
Focus on cartels
Abuse of Dominance
Civil and criminal breach
A breach of Art.102 TFEU is a criminal offence under Irish law
Difference in penalties

10. Concentration Control
Competition Authority is centre-stage with Ministerial involvement limited to media mergers and emergency financial mergers
“Substantial lessening of competition” test
Notification and publication regime
Some interesting cases

11. Concentration Control
two or more previously independent undertakings merge; or
one or more undertakings, who or which control one or more undertakings, acquire direct or indirect control of the whole or part of one or more other undertakings;
the result of an acquisition by one undertaking (the first undertaking) of the assets (including goodwill) (or a substantial part of the assets) of another undertaking (the second undertaking) is to place the first undertaking in a position to replace (or substantially replace) the second undertaking in the business or, as appropriate, the part concerned of the business in which that undertaking was engaged immediately before the acquisition;
a full function joint venture is formed (i.e., one which performs, on an indefinite basis, all the functions of an autonomous economic entity)

12. Concentration Control
Notifiable if:
The worldwide turnover of each of at least two of the undertakings involved in the transaction is not less than €40 million; and
Each of at least two of the undertakings involved in the transaction carries on business in any part of the island of Ireland (i.e., the Republic and Northern Ireland); and
The turnover in the Republic of any one of the undertakings involved is not less than €40m or it is a media merger
(Voluntary filing regime possible for other transactions)

13. Concentration Control
“Carries on Business” is a critical concept
Non-binding notice published by the Authority in 2006 defines “carries on business” as meaning that the undertakings have either:
Have a physical presence on the island of Ireland and make sales or supply services to customers in the island of Ireland; or
Without having a physical presence on the island, have made sales into the island of Ireland of at least €2 million in the most recent financial year

14. Concentration Control
Media Mergers
Since 1 May 2007, a “media merger” is a merger or acquisition in which either: (1) two or more of the undertakings involved carry on a defined media business in the State; or (2) one or more of the undertakings involved carries on a media business in the State and one or more of the undertakings involved carries on a media business elsewhere
A media business is defined as: (1) publication of newspapers or periodicals consisting substantially of news or periodicals consisting substantially of news or current affairs; (2) sound and/or audio broadcasting (except over the internet); or (3) the provision of a broadcasting services platform
Thresholds do not apply – media mergers are automatically notifiable
Cumbersome procedure in theory but works in practice
However, what if a Group (which happens to include a media business) buys something which is clearly not media-related?

15. Concentration Control
Financial Mergers
The pre-existing regime and the Credit Institutions (Financial Support) Act 2008 regime both operate
Section 7 of the 2008 Act has a special regime
Maintenance of the stability of the financial system v. competition law?
2008 Act transactions are notifiable to the Minister rather than the Competition Authority
Clearance of an otherwise anti-competitive deal is possible where it is necessary to maintain the stability of the financial system in the State, to avoid a serious threat to the stability of credit institutions and to remedy a serious disturbance in the economy of the State

16. Concentration Control
Notification Process under the Competition Act
Notification within one month of concluding the agreement or the making of the public bid – can that be circumvented?
The “one month” is calculated by including the date after which the month commences so the month expires on the day before the corresponding date the following month
Failure to notify has consequences

17. Concentration Control
€8,000 filing fee
Calendar days not working day timetable
First Phase procedure: typically, one month but can be 45 days with proposals from the parties
Second Phase procedure: can be longer – up to four months normally with conditions imposable by the Authority
Vast majority of cases are first phase decisions
Opening a second phase is not necessarily a problem

18. Concentration Control
Clearance is a precondition to closing concentrations
Clearance without approval in Ireland
Aviva/CGU/Gresham
Radio 2000/Newstalk 106
Topaz/Statoil
Third party involvement

19. Concentration Control
Three deals blocked:
IBM/Schlumberger (high market share)
Kingspan/Xtratherm (competitor evidence)
Kerry Foods/Breeo (no credible alternative constraining brands)
One appeal, successful at High Court level but now on appeal to the Supreme Court (Kerry Foods/Breeo)
Britvic/C&C
Heineken/Beamish & Crawford
Johnston Press/Clonnad

20. Criminal Enforcement Criminal Enforcement To date, 33 convictions
How? Leniency and transparency of some trade association activities
Are juries willing to convict?
What are the guidelines on sentencing?
What are the lessons?
Little guys
Procedures
Leniency
Cartels

21. Some Interesting Cases
For example:
West of Ireland Home Heating Cases
Competition Authority v Duffy
Law Society v Competition Authority
Mayo Waste
Panda
Irish Beef
Competition Authority v LVA and VFI

22. Some Interesting Cases
Law Society v Competition Authority
Legal representation of suspects in cartel investigation
Competition Authority stated that it could veto the choice of lawyer where several suspects chose the same lawyer
Law Society was concerned from a general policy perspective
Forced to institute proceedings in the High Court
High Court annulled the Competition Authority’s “notice”

23. Some Interesting Cases
Irish Beef
“Rationalisation”
Government involvement and McKinsey Report
“Stayers” and “Goers” with compensation
Competition Authority
High Court not concerned under Article 101(1)
Supreme Court appeal by the Authority
Article 267 reference to the CJEU
Supreme Court decision and reference back to the High Court
High Court to consider application of Article 101(3)
European Commission intervention

24. Some Interesting Cases
Mayo Waste
Controversial case
Jury
Decision-making by the jury
“Theory of harm” issue
Farmers’ blockade of Drogheda port case
Concerns by the Competition Authority

25. Some Interesting Cases
Competition Authority v LVA and VFI
Recession and declining on-trade drink sales
Two vintners’ associations announce a “price freeze”
Competition Authority reacts with concern
Associations refuse to withdraw it
But associations had some years earlier given undertakings not to do anything with pricing
Competition Authority invoked those undertakings and sued the associations
Court found the associations were in breach of those commitments

26. Some Interesting Cases
Panda
Application of Competition Acts to the Local Authorities
Decision by the High Court
Competition Authority v Avonmore Waterford Group/Athboy Co-operative
Ballina Mineral Water v Heineken
Irish Dental Association
Civil damages actions
Donovan v ESB
Follow-on actions

27. Key Differences in the Irish System
Different law and legal regime
Strong written Constitutional protection of human rights
Competition Authority deals only with competition (not consumer matters) but this is scheduled to change
Historically, strong international team in the Authority but constant change
Competition Authority does not have power to impose fines – the court is where the real enforcement lays
A strong but intermittent US dimension to Irish competition law
High market shares are not an issue
Hold separate/fix-first arrangements are unusual

28. Do not rely on the private enforcement of competition law
Lessons
Do not rely on the private enforcement of competition law
Streamline merger control
Abolition of notifications but community still needs guidance
Merger of the Competition Authority and Consumer Body?
Competition enforcement by lower courts is not easy
Competition enforcement by some juries may not be easy
High market shares not necessarily a problem in concentration control

29. Be careful of open-ended and wide studies
Lessons
Be careful of open-ended and wide studies
Valuable international experience and expertise
But “chopping and changing” of personnel
Trade associations
Authority is subject to the vagaries of political “respect”
Cartel enforcement has been against the “little guys”
BIDS and the State element
Public understanding and acceptance or is “competition” something you can have in a boom but not in a bust?

30. Competition Law Association What do I need to know about Competition Law in Ireland and what can we learn from 20 years of its operation?
Dr Vincent Power, Partner
A&L Goodbody
25 February 2010