A new era has begun. From now on, Irish enforcers may recommend fines for EU and Irish competition rules breaches.
The Competition and Consumer Protection Commission (CCPC) can also seek jurisdiction on below-threshold merger activity more readily.
These changes are due to the entry into force of the Competition (Amendment) Act 2022 (Act) on 27 September 2023. The Act aims to ensure the CCPC has effective investigation tools and appropriate enforcement powers. The CCPC's previous inability to recommend fines has long been out of step with other national competition authorities in the EU.
Key changes are:
- 'Calling-in' below-threshold mergers:
The CCPC can now more readily require parties to notify a
non-notifiable merger where it learns about a deal that it
considers may have a negative effect on competition in markets for
goods and services in the State. Interim measures can also be
imposed where the CCPC considers a notified deal may undermine
competition.
- Quasi-administrative penalties: Where the CCPC
(or ComReg) conducts an investigation, either in response to a
complaint or of its own initiative, and believes there has been a
competition law breach, quasi-administrative enforcement is now an
alternative to seeking declaratory or injunctive relief or criminal
prosecution. For the CCPC, the choice of enforcement route will be
influenced by its overall objectives, the nature of the alleged
breach and the likelihood of successful action. Any financial
sanctions must meet statutory criteria (including ensuring they are
proportionate, appropriate and effective as deterrents). The CCPC
has issued guidance on financial sanctions that sets out mitigating
factors and circumstances that could increase the fine
payable.
- Specific prohibition on 'bid-rigging':
The CCPC has been very vocal about the harm caused by a group of
undertakings forming an agreement or concerted practice relating to
a bidding or procurement process without informing the entity
calling for bids. To date, these practices have been investigated
and prosecuted as a form of price-fixing or market sharing, but
now, under the Act, 'bid-rigging' is a specific
offence.
- Administrative leniency policy (ALP) for
cartels: Applicants can seek immunity from, or reductions
in, quasi-administrative sanctions. The ALP is separate from the
current Irish Cartel Immunity Programme (CIP)
operated by the CCPC and the Director of Public Prosecutions: an
undertaking granted leniency under the ALP is not necessarily
immune under the CIP, and vice versa. Under the ALP, immunity is
available for the first successful applicant, and subsequent
applicants may benefit from a fine reduction of up to 50 per cent.
The CCPC has also extended the ALP to cover the non-cartel
infringement of resale price maintenance.
- Expanded surveillance powers: The CCPC can now ask the District Court to authorise surveillance to obtain information or evidence, previously a power only available to the military and Gardaí.
These changes do not fundamentally broaden the type of conduct that will break competition law rules. But they do give the CCPC greater investigative powers and more scope to act meaningfully, both where it considers there has been a breach of competition law and where it wants to look under the lid of non-notifiable mergers. Parties whose arrangements give rise to competition concerns can expect to encounter a massively detailed administrative regime and new 'Adjudication Officer' counterparties. Pre-notification discussions (and possibly even voluntary notification) may become more common in the merger control space to manage competition risk for smaller transactions.
Contributed by: Hilary Beattie
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