Irish merger control law has become centre stage over the past year. More and more international transactions have to be notified to the Competition Authority because of the relatively wide ambit of Ireland's new merger regime in the Competition Act 2002. What are the lessons for lawyers internationally if their deal needs to be notified in Ireland?

Sixty-eight M&A deals have been notified to the authority since the 2002 act's merger control regime entered into force on 1 January, 2003. None has been prohibited so far. Few cases were controversial but there were still some key lessons. The authority has handled notifications efficiently and worked well within the time limits set down in the act in most cases. This is useful in terms of predictability and the time-tabling of deals. It means businesses can normally count on clearance in roughly one month from the date of notification where the deal is going to be approved.

Experience shows that the financial thresholds in the Competition Act 2002 for compulsory notifications may be too high in an Irish context (given its relatively small economy) but too low in an international context. Deals must be notified where they involve two businesses each with turnover of more than € 40m (£26.8m) and one carries on business on the island.

Transactions below the thresholds may still be anti-competitive and may need to be notified to the authority for approval. Voluntary notifications are rare – only one in 2003. During the past year, the authority indicated it is interested in reviewing some transactions below the turnover thresholds where such deals might be anti-competitive. This means smaller deals may be investigated by the authority where they are anti-competitive or involve an abuse of dominance. Transactions in the 'media' sector have to be notified irrespective of the turnover of the parties involved. This has meant that a significant number of the transactions notified are in the media sector.

Many of the notifications to the authority have little to do with Ireland and were so-called 'foreign-to-foreign' transactions. It may well be that the thresholds are too low in that they should require a more realistic or significant link to Ireland, otherwise transactions that have only a slight connection with Ireland will continue to be notified which have little real connection with the Republic.

Only three cases have gone to a Phase II. None has been prohibited. The authority treats a Phase II not necessarily as a sign that it has 'serious doubts', but that it needs more time. The authority has not yet prohibited a deal. This is not a sign of failure but actually a sign of a mature and reflective competition system. Most transactions are approved internationally – of 2,300 or so deals notified to the European Union (EU), only 18 were prohibited and some of those prohibitions had been annulled by the European Court of Justice. Many years can go by without an EU prohibition. The availability of specialist competition law advice to the parties contemplating deals and the availability of remedies and commitments may well mean that prohibition of deals should be a last resort under the Irish regime as well.

An interesting feature of the new regime has been the involvement of US lawyers and economists in adjudicating on matters before the authority because of the high number of US professionals working for the Irish Competition Authority. This has meant they have brought their experience from the US to bear in the Irish context. The analysis owes a great deal to the US merger experience but always with an Irish colour. The authority has been quite concerned about 'gun-jumping' and has issued a notice about it. The position on post-deal non-competes on sellers of businesses have remained unchanged and a two-year non-compete is still the norm.

The difference between the old regime whereby the Minister for Enterprise, Trade & Employment reviewed deals and the current regime is somewhat striking. The minister's department took a broad review and examined issues such as competitiveness and employment, regional development and so on. By contrast, the Competition Authority's approach is highly focused on the specific issue of whether or not the transaction would "substantially lessen competition".

There have been few EU Merger Control Regulation cases with an Irish interest to the European Commission (EC) during 2003. One case that had a significant Irish dimension was the Royal Bank of Scotland (Ulster Bank's) bid for First Active. Media reports indicated that the Irish Authority considered having the transaction referred back to Ireland from the EC. Ultimately, Ireland did not seek a reference back of the transaction and it was left to the EC, which approved it unconditionally. However, the lesson is that the Irish Authority may intervene in many future transactions that have an Irish dimension even if they have been notified to the EC. This could be very significant in the case of any deal involving the major Irish banks.

The future should see a maturing of the system with procedures and firms being adopted to take on board lessons learned in the first year. Third parties (e.g. competitors, customers and consumers) may become more involved in deals. The authority may also become interested in small but anti-competitive transactions exempted from compulsory notification. And, ultimately, more non-Irish lawyers will have to get to grips with the Irish regime.

Dr Vincent Power is head of EU & competition law at A&L Goodbody Solicitors.