The CCPC has recently published a procedure allowing businesses which are found to be in breach of competition laws to agree a settlement where an administrative investigation of the breach(es) has or is intended to be commenced.

Who does the Settlement Procedure apply to?

• The Settlement Procedure applies to undertaking(s) and associations of undertakings which breach relevant competition laws. Undertakings are individuals, bodies corporate or unincorporated bodies which are engaged for gain in the production, supply or distribution of goods or the provision of a service.
• Relevant breaches competition laws arise where:
  • undertakings engage in anti-competitive arrangements contrary to Article 101 TFEU/ Section 4 of the Competition Act 2002; or
  • where undertakings are found to abuse a dominant position contrary to Article 102 TFEU/ Section 5 of the 2002 Act.

 What is the Settlement Procedure?

• Settlement discussions are entered into between the CCPC and the offending undertaking with the aim of reaching a Settlement Agreement. Discussions may be entered into before or after a Statement of Objections (setting out the CCPC’s preliminary view of the investigation) has issued. The Settlement Procedure varies slightly depending on when the Statement of Objections issues.
• The Settlement Procedure concludes when a Settlement Agreement is reached or when either party opts to withdraw from the discussions.
• A Settlement Agreement can only be concluded after a Statement of Objections has issued. Once a Settlement Agreement is reached, it is sent to an Adjudication Officer in an investigation for an order on consent.
• The Settlement Procedure does not suspend the ongoing investigation of the CCPC.
• The Settlement Procedure is voluntary, it is at the discretion of the CCPC, and it may be proposed by either the CCPC or the offending undertaking. Agreement to enter into Settlement Discussions does not reflect the strength of a case and no inferences are drawn by the CCPC should an undertaking agree/refuse to engage with the process.
• The Settlement Procedure differs from other procedures carried out by the CCPC, such as investigations concluded by means of a commitment agreement and the Administrative Leniency Policy.

What is the outcome of the Settlement Procedure?

• The Settlement Procedure will result in reduced financial sanctions being imposed on undertakings which have breached competition laws. Since commencement of the Competition (Amendment) Act 2022 in 2023, financial sanctions of up to 10% of the annual turnover of the undertaking or €10m (whichever is greater) may be imposed on offending undertakings.
• To avail of the Settlement Procedure and obtain a reduced sanction, the offending undertaking must admit it has breached or is in breach of competition laws. This will be reflected in any Settlement Agreement reached.
• The offending undertaking must also agree to carry out any remedial action which the CCPC seeks to impose.  

Aim of the Settlement Procedure

• It is the intention that the Settlement Procedure will resolve competition law investigations efficiently and promptly, while ensuring that undertakings which breach competition laws are sanctioned appropriately. The CCPC’s view is that the process will save time, costs and lessen the administrative burden required for investigations, and that engagement by the undertaking to achieve this should be rewarded by applying reduced financial sanctions.
• However, the CCPC will not allow the Settlement Procedure to be used as a mechanism by the offending undertaking to dispute the merits of the administrative investigation or to admit a lesser breach than the CCPC’s preliminary view in exchange for the CCPC closing its investigation.

The decision by a business as to whether to invoke the Settlement Procedure is one which calls for serious consideration. If you would like further information on the Settlement Procedure, please contact David Phelan or Eimear Kinsella.