Tuesday, September 14, 2010
Posted by D. Daniel Sokol
Patrick Massey (Compecon) has written on TAKING POLITICS OUT OF MERGERS: A REVIEW OF IRISH EXPERIENCE.
ABSTRACT: The Competition Act, 2002, radically altered merger control in Ireland, removing political involvement and assigning responsibility for reviewing mergers to an independent agency, the Competition Authority. This paper reviews the first 5 years of this new regime. The reform has increased transparency and made competition the sole criteria for the evaluation of mergers. There is evidence that most mergers notified have no competitive effect within Ireland, suggesting that the legislation is too broad in scope. Although relatively few notified mergers raised any competition concerns, this paper identifies problems in the Competition Authority's analysis in a number of these cases. The Authority has tended to rely on qualitative rather than quantitative evidence. In some instances, its analysis is inconsistent with economic theory. This applies particularly to its analysis of efficiencies. This paper therefore recommends that the Authority urgently review its merger procedures and introduce additional checks and balances in the merger review process. In addition, it should review its approach to efficiencies. This paper also suggests possible legislative reforms to reduce the number of unnecessary notifications and provide third parties with a right of appeal against decisions by the Authority.