The Guernsey Competition and Regulatory Authority has suspended a part of the process which it said had helped speed up decisions over the past few years.
Companies with a turnover in the Channel Islands of more than £2m., or a combined turnover exceeding £5m., still require approval before they can merge, but the GCRA said it could no longer offer them pre-application discussions.
The service has been funded through a competition grant provided by the Economic Development Committee. The committee said the grant had remained at the same level, but the GCRA claimed it was no longer sufficient to maintain all services.
GCRA chief executive Michael Byrne said that he regretted the need to withdraw pre-notification discussions, which had been available since 2017.
‘We are aware that this facility was a very valued part of the process and is standard in most jurisdictions as part of a merger regime, since it facilitates faster decisions on applications when they raise no issues for consumers,’ he said.
‘It contributed to an average time to clear mergers in Guernsey of under 15 days.’
The authority was able to continue assessing mergers which require its approval only because application fees provided an alternative source of funding outside the States’ grant.
Economic Development has asked the GCRA to re-examine its costs, overheads and revenue as an alternative to cutting services.
But the authority has said that pre-notification discussions, and various other services previously funded through the competition grant which have also been withdrawn, would not be reinstated until a long-term funding plan had been agreed following Economic Development’s ongoing wholesale review of the island’s competition and regulatory regime.
Guernsey’s current merger approvals legislation was established in 2012. It was designed to prevent the abuse of a dominant position within any market and prohibit anti-competitive behaviour.
The GCRA believed that pre-notification discussions were ‘in no small part’ responsible for the speed of decision-making over the past few years.
‘This pre-notification process was introduced because experience in other jurisdictions shows that it offers significant benefits to merging parties and is one of the ways the GCRA can be supportive of businesses,’ it said.
‘Pre-notification has enabled the GCRA, in conjunction with the merging parties, to identify areas where we do not require extensive information from them, thus reducing the administrative burden on businesses.
‘It has also enabled us to clarify the information that parties need to provide for the merger application form to be complete, which reduces the risk of delays during phase one due to needing to seek further information or clarification from the parties.’