After an 18 month investigation involving officials from both the Competition and Consumer Protection Commission (“CCPC”) and Ireland’s Director of Public Prosecution, and a first-ever criminal prosecution, a company that gun-jumped Irish merger control rules avoided criminal conviction by agreement to donate €2,000 to charity, following a guilty plea.

Irish competition law renders it a criminal offence to put a transaction into effect without prior CCPC approval, if that transaction satisfies certain turnover thresholds. This offence deems the non-notified deal void and carries an initial fine of between €3,000 and €250,000 for the company, or for the person controlling the company if they knowingly and wilfully authorise or permit the breach.

In what was viewed by many as an important test case, the CCPC’s decision to take this case arose from an investigation into Armalou Holdings’ acquisition of a Ford car dealership in 2015, which the parties failed to notify to the CCPC in breach of competition law. Having learned of the transaction from a third party in 2017, the CCPC required the parties involved in the deal to formally notify the transaction (which it later cleared unconditionally), and launched an extensive investigation into the suspected infringement before referring the file to the Director of Public Prosecutions.

In its judgment this week, the District Court noted that Armalou’s breach was inadvertent rather than wilful, and applied the Probation Act 1907 in conjunction with an order to donate €2,000 to the court’s “poor box”.  Such orders are commonly imposed by the District Court to avoid criminal convictions for less serious offences.

The District Court’s response to the infringement suggests an unwillingness to criminally convict companies for gun-jumping offences in Ireland. However, the court was likely influenced by the facts that the breach allegedly arose due to a misunderstanding on the applicable notification thresholds and the CCPC had not identified any competition concerns with the deal itself. Even so, the donation required appears insignificant in light of Armalou’s turnover, which reportedly amounted to €157 million in 2015.

In contrast, although not a criminal offence under EU law, failures to notify transactions to the European Commission have resulted in large fines. For example, last year the Commission fined Altice €125 million for gun-jumping.

Armalou’s co-accused, Airfield Villas Limited, had its hearing adjourned until 3 May 2019.

 


________________________

To make sure you do not miss out on regular updates from the Kluwer Competition Law Blog, please subscribe here.


Kluwer Competition Law

The 2021 Future Ready Lawyer survey showed that 78% of the law firms realise the impact of transformational technologies. Kluwer Competition Law is a superior functionality with a wealth of exclusive content. The tool enables you to make more informed decisions, more quickly from every preferred location. Are you, as a competition lawyer, ready for the future?

Learn how Kluwer Competition Law can support you.

Kluwer Competition Law
This page as PDF

Leave a Reply

Your email address will not be published. Required fields are marked *