While last year was characterised by a record number of merger notifications to the Irish Competition and Consumer Protection Commission (the CCPC), 2019 will likely mark a shift in focus towards more competition enforcement.
There are two principal drivers for this:
- First, revised merger notification thresholds, which took effect from 1 January 2019 [2], (see: previous news article) are expected to reduce the number of notifications to the CCPC by up to 40%. The CCPC has also consulted on a proposal to introduce a simplified process for those mergers that will still meet the new financial thresholds but do not give rise to material overlaps. Both of these initiatives will significantly reduce the volume of merger work the CCPC undertakes, releasing staff to focus on competition enforcement.
- Secondly, a new EU Directive 1/2019, titled “ECN+”, signed into law in December 2018, requires that all EU member States give their national competition authorities (in Ireland – the CCPC and Communications Regulator, ComReg), adequate investigative and fining powers. In January 2019 (in a joint presentation with the EU Commission) the CCPC confirmed that it would seek to retain the current criminal offence in addition to introducing administrative civil fines of up to 10% of worldwide turnover for competition infringements. [3] Once it acquires these powers, it will be expected to use them and so will start developing its pipeline well in advance of the deadline. [4]
As regards possible sectors of interest to the CCPC, while it is currently investigating secondary ticketing and the private motor vehicle insurance market, there are some indications that the pharmaceutical sector might be a potential future enforcement target.
- In June 2018, following reports that chiefs of competition authorities across Europe had met earlier in 2018 to discuss excessive pricing in the pharmaceutical sector, a spokesperson for the CCPC confirmed that this sector was being monitored following concerns raised regarding pricing issues (see: previous news article).
- On 28 January 2019, the EU Commission published a report showing that active competition law enforcement in the pharmaceutical sector contributes to more affordable medicines, more choice to patients and healthcare systems and further innovation. That same report encouraged national competition authorities to take action in this sector, identifying it as a “high priority”.
These developments, and the CCPC’s track record of acting in coordination with other national competition authorities and the EU Commission (for example on an investigation involving Booking.com), signal that enforcement action in the pharmaceutical sector in Ireland is a real possibility.
This article was co-authored by Kate McKenna, partner in the EU, Competition and Regulatory Group and Ronan Scanlan, senior associate in the EU, Competition and Regulatory Group.
[1] The CCPC pools its staff across both mergers and enforcement work.
[2] The new thresholds are: €10 million (turnover of each undertaking involved, eg acquirer and target, in Ireland) and €60 million (combined turnover of both undertakings, in Ireland).
[3] The CCPC does not currently have administrative fining powers and must prosecute such cases in Court.
[4] The Directive must be implemented by Ireland no later than 4 February 2021.