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The Competition (Amendment) Act 2012 ("the 2012
Act") came into effect on 3 July 2012. The measures contained
in the 2012 Act aim to meet Irish commitments in the EU/IMF
Financial Assistance Programme of 28 April 2011 and to aid the
Competition Authority ("the Authority") in both the
investigation and prosecution of anti-competitive practices. The
provisions also aim to enhance private enforcement.
The proposed new legislation was highlighted in our autumn 2011
newsflash1, however the 2012 Act contains some
additional, and in some cases innovative, provisions to strengthen
both public and private competition law enforcement.
The new provisions have the potential to advance both the public
and private enforcement regime. As the summary table shows, not
only has the severity and range of sanctions available to Courts
increased, the 2012 Act also includes some novel provisions in
relation to settlement arrangements between the Authority and
parties, follow-on actions, and the imposition of orders for
costs.
Settlements
Authority investigations resulting in a settlement between the
parties under investigation and the Authority are currently often
published on the Authority's website at the end of the
investigation. This settlement will have been reached in order to
avoid litigation. New provisions in the 2012 Act will now allow the
High Court, upon application by the Authority, to make commitments
provided to the Authority to be made an order of Court. Certain
criteria must be met, which include:
Consent to the making of the order
Legal advice having been obtained by the party in advance of
consent
The agreement is clear and unambiguous and is capable of being
complied with
The undertaking is aware that failure to comply with the order
would result in contempt of court.
Before applying to the court, the Authority must publish the
terms of the agreement and information regarding the application on
its website and in at least two daily newspapers circulating
throughout Ireland. The order may be varied or annulled on
application by a person within 45 days from the making of the order
if the order would force the person giving the undertaking to
breach a contract with the applicant or would render a term
incapable of performance. No order will be made by the High Court
to vary or annul an order if the contract or term of the contract
contravenes section 4 or 5 of the Competition
Act 2002 or Article 101 or 102 of the
TFEU. The Court order will last for seven years however
the Authority can apply, within three months of expiration, for an
extension for a further period of three years.
Follow on Action for Damages
The 2012 Act aims to simplify the taking of follow-on action for
damages. Where a court (either civil or criminal) determines that
an undertaking contravened section 4 or 5 of the
2002 Act, or Article 101 or 102 of the
TFEU, that finding will be res judicata for the purposes
of any subsequent proceedings whether or not the parties to the
follow-on proceedings are the same as the parties to the original
proceedings. Consequently, plaintiffs in follow on actions will no
longer have to prove the competition law breach but will only have
to prove loss, causation, and quantification of damages.
Costs of Investigations
The 2012 Act provides that persons convicted of a criminal
offence will be ordered by the court to pay the costs associated
with the investigation, detection and prosecution of the offence,
unless the court is satisfied that there are special and
substantial reasons for not doing so. This is a potentially
significant enhancement to the regime.
Conclusion
The Competition (Amendment) Act 2012 serves to
strengthen both public and private enforcement. The provisions
relating to settlements and follow-on actions are noteworthy and it
will be interesting to observe how the provisions are employed in
practice, and, in particular, how quickly and energetically the
Authority makes use of the settlement procedure.
This article contains a general summary of developments and
is not a complete or definitive statement of the law. Specific
legal advice should be obtained where appropriate.
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