Remedy Commitments Required for a Previously Non-Notifiable Transaction

A recent transaction cleared by the Competition and Consumer Protection Commission (“CCPC") serves as a reminder that acquisitions of entities with less than €3 million annual turnover can still cause a significant lessening of competition, and may have to be notified even though the turnover thresholds for a mandatory filing are not met. 

The acquisition of Newsaccess by Kantar Media ("Kantar") was assessed by the CCPC notwithstanding the fact that the turnover of Newsaccess was less than €3 million and therefore did not meet the financial thresholds to file a mandatory merger notification in Ireland.[1]  Both businesses are significant providers of media intelligence services, measuring press, broadcast and online coverage of clients. Prior to the transaction, Kantar and Newsaccess were the two dominant providers of media monitoring in the print and broadcasting industry.

Following market surveillance, the CCPC was concerned that the transaction would eliminate Kantar’s closest and most substantial competitor in the market for print and broadcast media monitoring services in the State, and requested the companies to notify the transaction under Section 18(3) of the Competition Act 2002 (as amended) (“the Act”). This provision aims to ensure that mergers are assessed where they do not meet the normal financial thresholds for mandatory notification, but are still likely to result in a substantial lessening of competition in the State.

Investigation

Following notification on 9 March 2017, the CCPC undertook an extended preliminary (Phase 1) investigation. Requirements for Information from the parties and consultation with a number of organisations, including competitors, industry bodies, and customers were also a part of the investigation. In this instance, the professional body for Irish communications and PR practitioners, the PRII, who had taken issue with the merger earlier this year, and consequently advocated for the need for greater competition in the area of media monitoring.

Remedy proposals

The CCPC required Kantar Media to submit significant remedy proposals pursuant to Section 20(3) of the Act aimed at replacing competition that would have been lost as a result of the Proposed Transaction in the potential market for the provision of media monitoring services (print and broadcast) in the State.

Accordingly, Kantar is now subject to wide-ranging commitments aimed at establishing an alternative player in the market. Kantar must divest all the fixed assets (computer hardware) of Newsaccess; release a number of its contracted customers from the remaining term of their fixed term contracts; and provide the purchaser of Newsaccess with Newsaccess’ customer contact details and archived material. Additional commitments related to the operation of aspects of the Newsaccess business for a specific period after the implementation of the proposed transaction, non-solicitation of customers, and the need for Kantar to notify the CCPC of any future planned mergers or acquisitions within two years.

The merger was ultimately cleared on the basis of these binding commitments being accepted by the CCPC. The outcome is particularly striking given the extent of the remedies extracted by the CCPC from Kantar in circumstances where the merger did not meet the financial thresholds for mandatory notification in Ireland.

For further information on trends and thresholds for merger notification, click here to read the findings of our Merger Control Update published earlier this year.

For advice on merger notifications, contact the ByrneWallace EU, Competition and Regulated Markets Team.