Second Dublin dealership pleads guilty over merger

A second Dublin motor dealership is to be spared a conviction for failing to notify the Competition and Consumer Protection Commission (CCPC) about a takeover of a rival firm.

Dublin District Court heard the case against Armalou Holdings Ltd and Airfield Villas Ltd was the first prosecution of its kind in Ireland for an offence known as "gun jumping". It followed a merger between subsidiaries of each company.

On Friday Judge Anthony Halpin noted Armalou Holdings Ltd had complied with an order to donate €2,000 to charity. It had pleaded guilty a month ago to six counts under Section 18 of the 2002 Competition Act.

Judge Halpin ordered the company to contribute €2,070 toward prosecution costs.

A guilty plea was also entered to the same charges by Airfield Villas Ltd on Friday.

Judge Halpin noted there were no adverse effects for consumers and the breach of competition law had been inadvertent. He adjourned both cases until May 30th.

He said he will apply the Probation Act if Airfield Villas Ltd also gave €2,000 to charity and paid €2,070 toward prosecution costs.

Spirit Ford bought rival Lillis-O'Donnell Motor Company in 2015, but failed to alert the CCPC, as required under merger law, Ronan Kennedy BL, prosecuting, told Judge Halpin.

Spirit Ford was a subsidiary of Armalou Holdings Ltd.

In the district court a fine of up to €3,000 can be imposed for each offence.

Joseph Walser, an authorised officer with the CCPC, said in evidence that the agency learned Spirit Ford bought rival Lillis-O'Donnell Motor Company, a subsidiary of Airfield Villas Ltd.

Mr Walser agreed with the prosecution barrister that Spirit Ford, based at Maple Avenue, Sandyford, Dublin, operated a franchise to sell Jaguar, Volvo, Land Rover and Ford cars.

Lillis-O’Donnell Motor Company had a Ford dealership at the Red Cow Interchange in Dublin.

The buyout commenced in 2014 and was not complete until December the following year. However, in the intervening period the value threshold requiring the CCPC to be informed was reduced.

It was necessary for the CCPC to be alerted to carry out competition analysis before giving clearance for the transaction which would otherwise be void, the court heard.

“Gun jumping” was prohibited and was taken very seriously, the prosecution barrister said.

The court also heard the two firms hoped to sell their cars from an outlet in Baldonnell.

Mr Walser told the court that 12 witnesses were interviewed.

Following the investigation, the CCPC carried out analysis and was satisfied the merger would not lesson competition. The transaction was then cleared.

The witness agreed with John Fitzgerald SC, for Armalou Holdings Ltd, that there had been delay in completing the takeover. During that time the regulations had changed and the value threshold for informing the CCPC was reduced significantly.

Mr Fitzgerald said the law change led to a misunderstanding among Armalou Holdings Ltd's professional advisers. The breach of regulations was inadvertent, he said.

The firm had which has been around since 1974 has no prior convictions.

Pleading for leniency, counsel asked the court to note the company’s co-operation with the investigation.

Breffni Gordon BL for Airfield Villas Ltd told the court his client was also pleading guilty.