The Gazette 1992

JANUARY/FEBRUARY 1992

GAZETTE

saction, even one which is approved by the Minister under the 1978 Act, may be contested by a third party in the courts. For example, the acquisition of a minority share- holding in a competitor may fall

As to the likely application of the competition rules, companies will need to ensure that their agree- ments and practices comply w i th Sections 4 and 5 of the Act. At the same time, companies can rely upon the new legislation in order to compete w i th their competitors. For example, a new entrant to a market dominated by one particular company may use Section 5 in an attempt to open up the market. It has to be said, however, that the lack of enforcement powers on the part of the Competition Authority may seriously unde rmi ne t he effectiveness of the new legisla- tion. Given the costs and time constraints involved in High Court litigation, the policy of enforcement through the Courts may prove to be ineffective. Experience at the EC level might also suggest so. That said, Irish business has entered a new legislative era and companies will need to ensure that they not only comply w i th the new law but also use it to their advantage where appropriate. •

will now be notifiable to the Minister for Industry and Com- merce under the 1978 Act where it results in the acquiring company obtaining more than 2 5% of the voting rights in another company;

"It has to be said, however,

that the lack of

enforcement

powers

on the part of the Competition

Authority

may

seriously

undermine

the effectiveness

of the

new

legislation"

previously, the threshold was 30%. The Competition Act also intro- duces a number of amendments to procedures under the 1978 Act. In addition, there is the possibility that mergers and acquisitions, including those which are notifiable under the 1978 Act, might be con- tested in the Courts on the basis of Sections 4 and 5 of the Competition Act. The relationship between the t wo Acts is not clear and this issue may not be fully resolved until t es t ed in t he Courts. In the meantime, lawyers will have to con- sider the possibility that a tran-

within Section 4 (1) of the Act whilst the acquisition of one com- pany by another company which is already in a dominant position may raise issues under Section 5 of the Act. Comment The Competition Act represents a major development in Irish Law. Traditionally, the market place in Ireland has been regulated by law to only a limited extent. This legis- lative environment can only have encouraged practices wh i ch may now need to be reviewed in the context of the new legislation.

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