by David Phelan March-24-2022 in Litigation & Dispute Resolution, Commercial & Business, Competition Law, Corporate

The Competition (Amendment) Bill 2022 (the “Bill”) was recently published by the Minister for Enterprise, Trade and Employment. If enacted, the Bill will confer greater powers on competition and regulatory authorities, in respect of the investigation and sanctioning of businesses found to be engaging in anti-competitive practices.

The Bill is currently in the Third Stage before Dáil Éireann. The objective of the Bill is to implement the EU Directive 2019/1 (ECN+ Directive) into Irish Law. Ireland is a year late in implementing the Directive and as a result, the Bill will need to be passed and legislation enacted rapidly, in order to align Irish competition law with an EU standard.

Key Changes

Companies which come under scrutiny of the competition authorities, including the Competition and Consumer Protection Commission (the “CCPC”) and the Commission for Communications Regulation (the “ComReg”), may be subjected to new criminal and new civil penalties, as set out in the proposed legislation.

Standard of Proof

At present, the CCPC can only make a recommendation to the Director of Public Prosecutions (“DPP”) to prosecute companies in breach of competition law. Currently, a criminal standard of proof of violations by companies is in place. Under the proposed legislation, a lower and civil standard of proof will be introduced. This means that companies believed to be in violation of competition law, which are deemed to be “intentionally, recklessly or negligently” in breach, may be liable and subject to the proposed sanctions.

Increased Penalties

The proposed legislation will give the CCPC authority to impose fines of up to €10 million, or alternatively,  10% of the overall worldwide turnover within the appropriate market, whichever of the two figures is larger.  These fines are intended to be different than those imposed by a court following a successful criminal prosecution, a key change which is being introduced by the Bill.

Companies may also be subjected to increased fines for proven criminal violations, a proposed €50 million or 20% of overall turnover, whichever is the greater.

Introduction of Administrative Procedure

The introduction of the Bill will enable competition authorities, specifically the CCPC, to adopt new policies allowing for administrative enforcement of penalties for breaches of competition law. An investigation by either authority, may be commenced if a suspected breach arises.

The investigation carried out by the CCPC or ComReg will result in a “statement of objections” being compiled, which sets out the “preliminary view” of the appropriate authority. The company in question will then be served with the statement of objections, to which the company may reply by way of submissions, and will gain access, on redacted basis, to the authority’s file.

Parties can seek to settle the matter, however, if the authority is not satisfied with the submissions, they will have the power to bring the investigation before an independent adjudication officer, who will utilise procedures similar to a Court, in deciding the type of sanction to be imposed on the offending company. The final decision of such sanction must be confirmed by the High Court. The Court of Appeal may hear appeals if there is question of exceptional public importance, posed by the parties and which is confirmed by the High Court.

The proposed legislation will also grant the CCPC certain powers of surveillance when investigating companies for alleged breaches of competition law.

Proposed Reform to Mergers

Businesses should bear in mind the proposed powers to be conferred on the CCPC, in relation to merger transactions. There are existing notification thresholds in place, which if met or exceeded mean that the companies involved in the transaction must inform the CCPC of the proposed transaction. The current thresholds are:

  • A combined turnover of minimum €60 million of all parties to the deal (in Ireland); and
  • Turnover of at least €10 million for two parties to the deal.

Although the thresholds are not due to change under the proposed legislation, new obligations on businesses to notify  the CCPC of certain “below threshold” transactions will be introduced. At present, there is no obligation on parties to a transaction to notify the CCPC of transactions which fall below the thresholds, and which may be considered to affect competition. They may do so voluntarily, should they wish to avoid an investigation by the CCPC. However, under the proposed legislation, the CCPC would have the power to enforce parties to notify them of any “below threshold” transactions, which may be considered harmful to competition.

If mergers are believed to be harmful to competition, companies which have completed transactions may be subjected to a review by the CCPC. The CCPC will have the power to dissolve such completed transactions and to ensure that, in circumstances where it is not possible to unwind the deal, steps are taken by the businesses to restore the situation before the finalising of the transaction. This is a further change being introduced by the Bill, as the CCPC currently does not have the power to dissolve completed deals.

Additionally, the CCPC will have specific powers to bring proceedings against companies found to be in in breach of Irish merger control prohibitions on gun-jumping. At present, the DPP is the authority who may bring summary proceedings before the District Court for such breaches. Currently, any deal which is not notified to or approved by the CCPC prior to being effected, is considered void. However, under the proposed legislation, this will be considered an offence and persons responsible for allowing this to occur may be liable for fines of up to €250,000, plus daily fines.

Next Steps

The Bill will be considered in the Dáil and Seanad, where it will be open to amendments. The policies to be adopted by the CCPC were considered initially on 14 February 2022, and consideration will continue throughout early 2022, during which time stakeholders and interested entities will have opportunities to provide their views on the proposed amendments.

For further information or guidance on the legislation, please contact David Phelan at Hayes solicitors LLP. 

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