The Dangers of Ad Hoc Changes to Merger Control Regulation: the Irish Financial Crisis

Ireland’s policy-makers were confronted with difficult decisions concerning the financial sector and competition policy during the recent financial crisis. In response, Ireland’s Credit Institutions (Financial Support) Act 2008 (‘CIFS Act 2008’) introduced ad hoc policy changes to the review of mergers deemed necessary for the stability of the Irish financial system. These changes were repealed in August 2013. This article explores the adequacy of the temporary ad hoc approach and highlight its significant shortcomings, on both procedural and competition assessment grounds. In contrast to this ad hoc temporary-changes approach, this article argues that in the context of a crisis, financial, or otherwise, requiring changes to merger control regulation, the competition agency should conduct the initial competition assessment and only then should non-competition criteria be applied by the relevant Minister and/or independent institution. The major lesson from the Irish experience is that side-lining competition concerns by a series of ad hoc short-term responses to problems in the financial sector is likely to damage growth and the recovery in the medium to longer term.