There are a number of distinct methods by which competition law is enforced. Agreements in breach of competition law are void and have no effect.
Third parties who suffer loss by reason of anti-competitive behaviour, they may take a civil claim for damages. Damages in a competition law case may be exemplary or punitive damages. This gives the incentive to take action.
The Competition Authority has the power to enforce competition law. It has extensive powers to investigate complaints. It may undertake prosecutions. It now has civil powers of enforcement, which can be used without application to the criminal Courts. It can levy the equivalent of “on the spot” penalties.
Many breaches of competition law constitute breaches of criminal law. They may be prosecuted summarily or on indictment. The more serious breaches of competition law may be prosecuted on an indictment can be lead to jail sentences.
The European Commission and the Competition Authority each have civil enforcement powers. The Authority is responsible for both enforcement of Irish and EU competition law in Ireland. The European Commission and the Authority each have extensive investigative powers. They are the police authority for competition law purposes.
Complaints of breach of competition law may be made to the Authority or European Commission. The Authority will acknowledge receipt of a complaint and notify the complainant when the case is being closed. Once the complaint is made, the Authority takes ownership of the complaint. They will not generally keep the complainant informed of the progress of the complaint.
The Authority publishes certain details of its enforcement activities. They publish enforcement decisions in selected cases to demonstrate their approach to particular matters. Details of undertakings may be published where they enter binding undertakings on settlement.
The Authority has wide powers of investigation. It may make unannounced visits to premises (dawn raids) pursuant to search warrants from District Court. It may inspect the premises, seize files and interview staff. It may take copies of documents. A person may be required to give information as the authorised officer deems reasonable.
Warrants may be sought where there are reasonable grounds to believe that relevant information may be available. Search warrants allow entry by force and seizure from premises of document, books and records as well as movable items such as computers. It is an offence not to respond to questions and requirements for information.
The Authority may retain documents and computers indefinitely. Gardai may accompany the Authority’s authorised officers in entering the property.
A legal adviser is entitled to attend during a search. The search will not be suspended to allow legal advisers to arrive. Persons questioned do not have a right to legal representation. They are not technically in custody.
Questions may be put, even though it is a penalty not to respond. The Courts have held that these types of powers are valid, notwithstanding the privilege against self-incrimination.
Certain cartel offences carry a sentence of more than five years. This makes them arrestable offences. A person who has been arrested may be brought to a Garda station for questioning. See the criminal procedural parts of this guide.
The Authority has the power to summons individuals to attend before it to answer questions and produce documentation. The Summons is a formal legal document equivalent to a High Court sub-poena. The Authority has the same powers as a High Court Judge in this context.
Persons may be examined on oath. They may be entitled to legal representation. Failure to appear is an offence. Failure to produce documents is an offence. A statement that has been extracted under compulsion, cannot be used to convict a witness in later criminal proceedings.
The European Commission has strengthened enforcement procedures and has powerful enforcement mechanisms available to it. Breaches of EU law are determined at the local level in the first instance. If EU officials carry out the investigations, they may use their own investigatory powers. They have the power to impose penalties. The EU law is directly applicable and overrides Irish law in this regard.
The Commission may enter premises and lands, take copies and extracts from books and ask for explanations on the spot. In practice, they will give representatives a brief period to allow legal representatives to attend. Businesses may face sanctions of up to 1% of their turnover if they obstruct the process.
If the Commission believes that there has been an infringement of European Union law, it will give a statement of objection. This is an administrative procedure rather than a court proceeding. The statement will describe the infringements, as alleged by the Commission. There will be a legal analysis of the complaint and its application to the facts.
The party against whom the objection is made may respond in writing. An oral hearing before a hearing officer may follow. The party may have a right to see the Commission’s file in advance. The hearing officer is an official of the Competition section but is independent of its enforcement units. He reports directly to the Commission.
The hearing is informal. It is not in the nature of a Court hearing. Both sides can put their version of events. The hearing is essentially private. After the hearing, the Commission makes a decision. It places a draft version before the advisory committee on restrictive practices and dominant positions.
This includes officials from multiple competition authorities. The Commission must consult with the advisory authority prior to making decisions. Once this is followed, the Commission may make a decision, which may include sanctions, such as a fine.
The Authority has powers of civil enforcement. When it gathers sufficient information, it may issue a letter to the effect that is about to commence proceedings. The business which is alleged to have infringed competition law can respond, setting out its positions on the matters alleged. It may offer commitments to discontinue the practice in return for the Authority not proceeding to Court.
The Authority may take action for breach of the prohibition on anti-competitive behaviour or abuse of a dominant position in the High Court or Circuit Court. It can seek a Court declaration or an Injunction.
The application may be sought for an injunction by way of a one-sided application where circumstances require. This may be necessary where pre-emptive action is necessary. In competition cases, there are a number of presumptions which assist the applicant.
It is a defence to agreement to show that the conditions efficiency criteria in the Competition Act apply to justify what would otherwise be anti-competitive behaviour or a breach of dominant position. It may also be shown that it benefits from a declaration or block exemption or does not affect competition appreciably. Objective evidence may be used as a defence to show that behaviour is justified under the legislation.
An Injunction may be granted under Irish law where damages would not be a sufficient remedy and the balance of convenience so required. See our guide in relation to Injunctions. In essence the detriment to the claimant must be greater than that to the plaintiff.
The Court may require the remediation of a dominant position. This may, for example, require the continuation of supply or the discontinuance of anti-competitive behaviour undertakings.
Any third party who is aggrieved by reason of a breach of competition law may seek a Court declaration or damages. This can include exemplary or punishment damages. The person must be aggrieved in consequence of anti-competitive behaviour or the abuse of a dominant position. The Court can require the behaviour to be discontinued and may award compensation. Damages for loss may be recovered in the normal way. Exemplary damages may also be awarded.
The Authority can intervene in litigation as a so-called friend of the Court. In this context, it may assist private litigation. Where numerous persons are affected by the same matter, they may take a single action for the benefit of all persons concerned. It appears that a person may take a right of damages for a breach of European Union law.
National Court did not make decisions, inconsistent with EU Commission decisions. Where it hears an appeal, it should stay the outcome pending the European decision in the matter. The European Union may impose significant fines, up to 10% of the turnover of the business in the previous year.
The Commission has regard to the gravity and duration of the infringement. The fines are not criminal in nature. Fines cannot be imposed after two years, in the case of infringements concerning requests for information. The period is five years, in the case of substantive infringements. The EU rules on fines provide a template for Irish Court decisions.
The EU can impose fines of up to 10% of the undertaking’s turnover for intentional failure to put in effect a concentration before notice. The merger is legally void. The Authority and European Commission may impose sanctions for failure to comply with merger rules. The transaction is void unless the requisite procedure has been followed.
Breaches of EU competition law are criminal offences in Ireland. The more serious offences may be tried by indictment in the Circuit Criminal Court or the Central Criminal Court. Summary offences may be heard by a Judge of the District Court. A summary conviction may be appealed to the Circuit Court. The DPP must approve cases for prosecution on indictment. The Authority investigates and prosecutes, in the case of summary offences.
The penalties applicable to breach of anti-competitive behaviour and abuse of dominant position are broadly similar. There is a distinction between a hardcore cartel offence and other offences. Hardcore cartels may attract prison imprisonment. On prosecution on indictment, undertakings are liable to fines of the greater of €4 million or 10% of turnover but not exceeding the greater of a specified amount.
Individuals are subject to fines and imprisonment up to five years. Undertakings guilty of unlawful cartels or abuse of a dominant position, may on summary conviction may be fined up to €3,000, or on indictment, up to the €4 million or 10% of turnover.
Fines may be imposed for each successive day, on which the offence takes place or continues. Directors, controllers and managers of companies may be convicted personally, if they have consented to the doing of the relevant act.
It is a defence to prove that one of the relevant block exemptions or a declaration applies. It is a defence to show that one of the validating grounds apply
Persons may be charged and convicted of aiding and abetting breaches of competition law. They are liable to the same punishment as if they committed the offence themselves.
Failure to give the necessary merger control notification is a criminal offence. It is may be punished, on summary conviction with a fine up to the €3,000 and on indictment, with a fine up to €250,000. Persons in control and management of a company which commits the offence, may also be sanctioned.
The Authority has published a leniency program for whistle blowers,. The leniency programme immunisses a participant who comes forward and giving evidence in return for immunity against prosecution or leniency. The applicant must provide timely co-operation, reveal all offences, provide full and frank disclosure and co-operate at their own expense.
2022 Act Offences
The 2022 Act amends the Principal Act, which relates to offences in respect of section 4(1) of the Principal Act or Article 102 TFEU, to introduce an additional requirement to the offences for the undertaking to either:
- Intentionally or recklessly act to prevent, restrict or distort competition, or
- Intentionally or recklessly make omissions having the effect of preventing, restricting or distorting competition
This has the effect of introducing a mens rea (guilty mind) element to the offence, which formerly operated on the basis of strict liability. Engagement oin bid-rigging as a form of agreement, decision or concerted practice for the purposes of the offence.
It also adds a similar mens rea element to offences in respect of breaches to section 5(1) of the Principal Act or Article 101 TFEU.
The 2022 Act extends the fines on conviction on indictment for key offences under the main Act extending the maximum fine from the greater of €5,000,000 or 10% of turnover to the greater of €50,000,000 or 20% of turnover.
There is an appeal from the decision of the Commission imposing a fine to the Court of first instance. The Court may cancel, reduce or increase their fine.
An appeal may be made on the merits and legality to the Court. An appeal lies in the Court of first instance to the European Court of Judgment.