IN a second discussion paper, the Competition Authority calls for changes to the Mergers Act to increase transparency and effectiveness, and ensure competition concerns are addressed.

"Arguably the only rationale for merger controls is to prevent those mergers which would have an anti-competitive effect and which would therefore be harmful to citizens and to the economy," the document says.

"While achieving that aim, it must be recognised that many mergers take place for perfectly legitimate business reasons, and a merger control regime should not place any unnecessary obstacles in the way of such mergers," it continues.

The paper suggests two options to the Government.

One involves retaining the present system while increasing resources devoted to dealing with mergers within the Department of Enterprise, Employment and Trade The Minister would have to issue clear policy guidelines.

Another option, says the document, is to require all mergers above a certain size to notify an independent agency - which may or may not be the Competition Authority itself.

Under this option, the Minister would retain the final decision, but would receive a recommendation from the independent agency.