New Competition Enforcement Regime comes into force in Ireland
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Introduction
27 September 2023 marked the commencement date for the Competition (Amendment) Act 2022 (the “2022 Act”). The 2022 Act implements the ECN+ Directive (Directive (EU) 2019/1) in Ireland (which is designed ensure that member state national competition authorities (NCAs) have similar powers for investigations and enforcement across the EU) and introduces an administrative sanctions regime as well as making changes to merger control regime.
New Enforcement Powers
(1) Administrative Fines
The 2022 Act marks a radical change to the enforcement of competition law in Ireland. Ireland has long been an outlier amongst EU NCAs in that the Irish authorities (the Competition and Consumer Protection Commission (“CCPC”) and ComReg (in the telecoms sector)) lacked the power to impose administrative fines for breaches of EU and Irish competition law. Heretofore, fines could only be imposed for breaches of competition law by a court in criminal proceedings, which could be prosecuted summarily by the CCPC in the district court (lowest level court) or on indictment (jury trial) by the Director of Public Prosecutions in the Circuit or Central Criminal Courts. While in theory fines of up to €10 million or 10% of worldwide turnover could be imposed in criminal proceedings, the largest fine imposed to date was €80,000.
The 2022 Act introduces an administrative sanctions regime which will allow the CCPC (acting through adjudication officers who will be separate from the investigation team) to seek the imposition of administrative fines on undertakings or associations of undertakings of up to €10 million or 10% of worldwide turnover for breaches of competition law (including failure to comply with commitments or implement structural or behavioural remedies). Due to constitutional limitations on the imposition of fines by non-court bodies, any proposed administrative fine will have to be confirmed by the High Court.
(2) Other Administrative Sanctions
The CCPC will also have the power to issue prohibition notices during the conduct of an investigation to prevent serious or irreparable harm to competition. Adjudication officers in issuing their decisions will also have the power to impose structural or behavioural remedies, which as with administrative fines will be subject confirmation by the High Court. Periodic penalties can also be imposed for non-compliance.
(3) Enhanced surveillance powers
The CCPC will now have the power to request a warrant from the District Court to carry out covert surveillance (including the use of tracking devices), powers which heretofore were only available to the police and military.
(4) New Bid Rigging Offence
A new express offence of “bid rigging” has been introduced, emphasising a particular enforcement priority for the CCPC in protecting the State’s procurement regime from anti-competitive interference and collusive tendering.
The current criminal sanctions regime will continue to co-exist with the administrative sanctions regime; however, the choice of on particular enforcement regime will preclude the use of the other regime.
Changes to Merger Control Regime.
The 2022 Act also makes significant changes to the merger control regime by introducing the power for the CCPC to investigate “below-threshold” mergers where the CCPC has reason to believe the merger may affect competition in the State. The power can be exercised up to 60 working days following the earlier of (a) announcement of the merger; (b) the CCPC becoming aware of the merger; and (c) completion of the merger. The CCPC will also have the power to impose interim measures where necessary to preserve the status quo.
The 2022 Act also introduces a number of other changes to the merger control regime including:
- the introduction of offences for implementing a merger or acquisition prior to receiving clearance (also known as “gun-jumping”) and a failure to comply with interim measures with daily fines for non-compliance;
- a mandatory obligation on third parties to reply to CCPC information requests; and
- requirement for responses to CCPC information requests to be certified by the responding party.
Conclusion
The introduction of an administrative sanctions regime is expected to lead to increased levels of enforcement in Ireland with a knock-on effect for follow-on private damages actions. For mergers and acquisitions with an Irish dimension, the parties will, in addition to checking the thresholds for mandatory notification, also need to consider the risk of call-in and, where applicable, engage with the CCPC in pre-notification discussions. This is likely to lead to an increase in voluntary notifications to the CCPC than has been the case to date.