Following commencement of the Competition (Amendment) Act 2022 ("2022 Act"), the enforcement powers of the Competition and Consumer Protection Commission ("CCPC") and the Commission for Communications Regulation ("ComReg") have been significantly enhanced. This article provides an overview of the main changes to the CCPC's powers and the CCPC's increased enforcement activity in the first half of 2024.
Overview of Enhanced Irish Competition Enforcement Regime
The 2022 Act was enacted on 27 September 2023, bringing about long anticipated reform of Irish competition law. The 2022 Act implements Directive 2019/1 ("ECN+ Directive"), which aims to ensure that all EU member state authorities have adequate enforcement powers to halt anti-competitive behaviour. The 2022 Act achieves this by conferring enhanced enforcement powers onto the CCPC and the ComReg.
Prior to the enactment of the 2022 Act, the Irish competition regime was governed by the Competition Act 2002 (as amended) ("2002 Act"). The CCPC's powers were limited to:
- Obtaining injunctive or declaratory relief through civil proceedings;
- Obtaining small fines or short terms of imprisonment through criminal proceedings on a summary basis;
- Instituting criminal proceedings on indictment in conjunction with the Director of Public Prosecutions ("the DPP").
The most significant reform of the 2022 Act is that it gives the CCPC enhanced powers to sanction anti-competitive behaviour and administer a fully-fledged 'whistle-blower' regime.
The key changes under the 2022 Act are as follows:
- Under the criminal regime:
- Increased fines for the company or individual officers of €50 million or 20% of domestic turnover
- New offence of bid-rigging to expedite prosecutions, and
- New CCPC surveillance powers under the Criminal Justice (Surveillance) Act 2009.
- Under the civil regime:
- New civil fines of €10 million or 10% of worldwide turnover, which can be imposed directly by the CCPC
- New Administrative Leniency Policy ("ALP") setting out under what conditions parties may be granted immunity and leniency from civil fines in 'blowing the whistle', and
- A new multi-stage adjudicative process, including an independent adjudication officer panel which will make final decisions on preliminary recommendations by the CCPC case team.
Enforcement Activity under the New Regime
Enforcement Priorities
In its 2023 'Guidance Note on Choice of Enforcement Regime', the CCPC makes reference to its 'Prioritisation Principles' which guide its enforcement priorities. These principles include the level of harm (economic and/or physical); likely impact of the CCPC's action; strategic significance; and risks, resources and costs.
Moreover, in its 2024-2026 Strategy Statement, the CCPC states that amongst its top priorities are increasing its "capacity to conduct multiple simultaneous large-scale investigations", assisting the European Commission and the competition authorities of other EU Member States with enforcement actions, and promoting "arrangements that enable anonymous whistle blowing".
In light of the CCPC's new leniency programme and its power to impose significant financial sanctions, it can therefore be expected that the CCPC will increasingly turn its focus towards investigating high-value cartel offences and other 'hardcore' restrictions on competition that threaten to cause significant consumer harm. These enforcement priorities are reflective of international developments in the area.
Recent Enforcement Activity
Since the new regime came into force last September, the CCPC has commenced or supported a number of investigations under the new regime, using its on-site inspection or 'dawn raid' powers in each of these:
- In December 2023, the CCPC carried out a number of dawn raids at business premises based in Cork, as part of a criminal investigation into potential price-fixing and cartel behaviour in the publicly funded transport sector.
- In February 2024, the CCPC carried out a number of searches of businesses active in the home alarm industry, as part of a criminal investigation into potential price-fixing offences. In March 2024, the CCPC proceeded to issue High Court proceedings against Phonewatch Ltd and its subsidiary Homesecure Ltd. These proceedings were issued under section 33 of the Competition and Consumer Protection Act 2014, which enables the CCPC to seek the disclosure of privileged legal material relevant to criminal investigations. Proceedings in this case were subsequently adjourned in order to allow the parties to agree a step plan concerning the identification of legally privileged material. The importance of step plans in resolving potential disputes over the issue of legal privilege was also highlighted in the recent High Court decision Eir v Commission for Communications Regulation. See our separate analysis of this decision and its implications.
- In March 2024, the CCPC carried out an inspection of Ryanair's headquarters alongside the Italian Competition Authority (the "AGCM"), on foot of a request by the AGCM. This inspection was in connection with an investigation into potential breaches of EU competition law concerning abuse of market dominance in respect of Italian online travel agents. Ryanair have since challenged the search in the High Court, raising issues in relation to the legality of the search warrant and arguing that many of the documents seized by the competition authorities were commercially sensitive, legally privileged or otherwise confidential.
Looking Ahead – Need for Increased Compliance Awareness
These developments are very much reflective of the CCPC's appetite to increase its enforcement activities and this trend is expected to continue. The current regulatory climate therefore makes it important for businesses to invest adequate resources into internal competition law compliance and dawn raid protocols and training employees on their obligations. This is key in ensuring businesses stay on the 'right side of the line' or can otherwise respond to inspections by regulators.
Matheson's Competition and Regulation group regularly advise on all aspects Irish and EU competition law and merger control and are on hand to provide any support as needed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.