The Competition Authority has recently decided to block the proposed acquisition by Kingspan Group Plc of Leanort Group on the grounds that the transaction would substantially lessen competition in the manufacture and provision of installation materials in the State. The decision by the Competition Authority is very significant in that it is only the second time that the authority has blocked a merger since the coming into force of the mergers provisions of the Competition Act 2002 (the Act) on 1 May 2003. The decision by the Competition Authority to block the merger was made after a full four-month phase 2 investigation. The Competition Authority's written determination was expected to be delivered just as Update went to press.

The first case in which the Competition Authority blocked a merger under the Act was the proposed acquisition by IBM Ireland Limited of the entire issued share capital of Schlumberger Business Continuity Services (Ireland) Limited, in which the Competition Authority determined that the result of the proposed acquisition would be to substantially lessen competition in markets for goods or services in the State on the basis of various factors, including that the parties were the two largest providers of business recovery hotsite services in the State, and that none of the potential sources of competitive constraint were sufficient to constrain the merged group's ability to increase prices.

The Competition Authority was notified of a transaction under the Act whereby Topaz Energy Group Limited would acquire the entire issued share capital of Statoil Ireland Limited. Topaz was the successful bidder after the completion of a sale tender process. The Authority conducted a very extensive phase 1 investigation, which included the following:

• the issuing of formal requests for information to both Topaz and Statoil,
  
  
• the assessment of third-party submissions,
  
  
• the issuing of questionnaires to competitors and customers of both Topaz and Statoil, and the assessment of the responses to those questionnaires,
  
  
• site visits to the oil terminals in Dublin and Galway,
  
  
• discussions with other government agencies, and
  
  
• an extensive research of the oil industry.

It was widely expected that the Competition Authority would launch a full four-month phase 2 investigation. However, the authority miscalculated the time limit within which it had to issue a decision on whether or not to launch a phase 2 investigation and consequently the case fell outside the relevant time limits. The result was that the merger was deemed to be cleared for the purpose of the Act.

The Competition Authority in a press release pointed out that Topaz had made proposals to address the competition concerns raised by the authority and had agreed to implement those proposals, despite the statutory clearance of the merger on an unconditional basis.

The Competition Authority announced in July that it has initiated proceedings in the High Court against the Irish Medical Organisation for breach of the Competition Act 2002. The authority stated that it had taken the action over the IMO's role in a dispute concerning fees paid by life assurance companies to GPs for certain types of medical information. The Authority began its investigation in February 2005. The dispute focused on fees paid by life assurance companies for two types of medical information:

• private medical attendant's reports (PMARs), and
  
  
• medical examination reports (MERs).

The Authority has said that in its view the IMO's conduct has the object or effect of preventing, restricting or distorting competition in the market for medical information and in the market for life assurance, contrary to section 4(1) of the Act. It believes that the IMO co-ordinated the behaviour of its GP members, including directing or recommending the fees that GPs should charge for PMARs and MERs. The Authority is also of the view that the IMO directed or recommended to GPs not to provide PMARs or MERs unless life assurance companies paid the recommended fees.

For further information please contact Marco Hickey or Jennifer Higgins.