DMG/JPIMedia – Proposed Acquisition Void because of ‘Gun-Jumping’
23 January 2020
The Competition and Consumer Protection Commission (“CCPC”) recently announced that a proposed acquisition by DMG Media Limited, a wholly owned subsidiary of Daily Mail and General Trust Plc, of sole control of JPIMedia Publications Limited, a wholly owned subsidiary of JPIMedia Limited, was void because of ‘Gun-Jumping’.
Gun-Jumping is the offence of implementing a merger or acquisition that is notifiable to the CCPC without first securing clearance from the CCPC. Such a transaction is void under section 19(2) of the Competition Act 2002. Furthermore, significant penalties can be imposed (i.e. fines on conviction on indictment (a jury trial) of up to €250,000 (with a maximum daily default fine of €25,000)).
In this case, the relevant transaction was notified to the CCPC on 29 November 2019 in accordance with section 18(1)(b) of the Act which relates to notifiable mergers and acquisitions involving media businesses.
On 10 January 2020, the CCPC made the following announcement that as the parties had implemented the acquisition before receiving clearance from the CCPC, the acquisition was void: “Following enquiries by the CCPC, Daily Mail and General Trust Plc confirmed that the acquisition was put into effect on 29 November 2019. By implementing the acquisition before receiving clearance from the CCPC, Daily Mail and General Trust Plc and JPIMedia Limited have infringed section 19(1) of the Competition Act. Consequently, as provided for by section 19(2) of the Competition Act this acquisition is void. The CCPC will continue to assess the notified transaction in accordance with the Competition Act”
This is the latest investigation in the CCPC’s recent trend of taking enforcement action against Gun-Jumping. In April 2019, it secured its first ever criminal conviction for Gun-Jumping.
Going forward, the CCPC will have substantially more resources at its disposal to investigate competition law infringements such as Gun-Jumping, because resources which were previously dedicated to carrying out merger review have now been “freed up” due to a significant decrease in the number of transactions notified to the CCPC. In total, just 47 transactions were notified to the CCPC in 2019 (a 52% decrease from 2018). This decrease was the result of an increase from 1 January 2019 in the turnover thresholds at which a notification of a merger or acquisition to the CCPC is required.
Parties involved in mergers or acquisitions in Ireland should ensure that they are fully aware of the rules on merger control and Gun Jumping and if uncertain, should contact their competition advisors to avoid any unnecessary risk.
For further information please contact Eoghan Ó hArgáin, Head of EU Competition and Regulated Markets at Eugene F Collins.