Businesses that agreed mergers or takeovers in recent weeks may face investigation by competition regulators as a result of a Government mistake, it has emerged.
Minister for Enterprise, Tourism and Employment, Peter Burke, increased the financial values at which mergers must be notified to the Competition and Consumer Protection Commission (CCPC) in July.
However, his department has confirmed that Burke’s order lapsed on September 30th, when it emerged that the Oireachtas had not approved it on time, exposing deals agreed or completed since that date to possible investigation by the commission.
The ministerial order increased the financial threshold at which mergers must be notified to the commission to a combined turnover of €100 million or more, from €60 million.
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Competition law obliges the CCPC to investigate deals meeting the threshold to ensure they do not damage competition in their relevant markets, before approving them, often with conditions meant to protect competition.
As the order lapsed on September 30th, the old rules have applied since then.
So mergers or takeovers agreed or completed since then, where the parties’ combined turnover is €60 million or more, and two of those involved have sales of at least €10 million each, may face investigation by the commission.
The CCPC is advising businesses involved in transactions either agreed or completed since September 30th to consider if they meet the old threshold and whether they should notify it of the deal.
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The commission pledged not to investigate any parties to deals done in those circumstances for “gun jumping”, that is completing the transactions before getting its approval.
Any mergers completed between July 1st and September 30th were subject to the increased threshold, that is a combined turnover of €100 million or more, and at least €15 million for two of the parties involved.
According to the department, Burke’s order increasing the threshold was laid before the Oireachtas, but did not get the approval of both the Dáil and Seanad within the time set out by the Competition Act, 2002.
“As a result, the order ceased to have effect,” said a spokeswoman, who confirmed that the error emerged following a department review.
The Act requires the CCPC to investigate mergers for their likely impact on competition, but gives the Minster the power to raise the thresholds for such inquiries to keep them in line with inflation and economic circumstances.
Ministerial orders, also dubbed statutory instruments, generally need Oireachtas approval before taking effect.
Burke signed the order on June 10th, branding the move part of his efforts to cut red tape for business.
The Minister said at the time that he increased the financial notification threshold in response to a public consultation that he held earlier this year.
The CCPC favoured an increase as it allowed the regulator to focus resources on deals more likely to have a meaningful impact on competition and consumers.
The last increase was in 2019, before the significant inflation that followed Covid and the war in Ukraine.
The commission has the power to “call in” transactions below the €100 million value where it believes they could affect competition.
The department will work with the CCPC to “progress revised merger notification thresholds at the earliest opportunity in 2027,″ according to its spokeswoman. The law allows only one change each year.
