The Bill proposes to (i) make entry into or implementation of anti-competitive arrangements a criminal offence which would expose participating persons, companies or firms (and in the case of companies, any director, manager, secretary or other similar officer) on being found guilty of an offence, to very substantial fines and/or terms of imprisonment and (ii) to confer powers of enforcement and of investigation of their own initiative on the Competition Authority and (iii) to provide for the imposition of a fee to accompany notifications under the Mergers, Take-Overs and Monopolies (Control) Act, 1978 as amended ("the 1978 Act").
The Bill proposes two fundamental changes to the existing competition law framework introduced by the Competition Act, 1991:
- New Offences - at present, Section 4 of the 1991 Act prohibits anti-competitive agreements, decisions and concerted practices. The Bill proposes to make it an offence to enter into or implement such arrangements and to penalise participants and, in the case of companies, the participating management.
Being found guilty of an offence under the Bill will make any
participating undertaking liable:
- for minor offences, to a fine not exceeding IR£1,500 or, in the
case of an individual, to such a fine or, at the discretion of
the Court, to imprisonment for a term not exceeding six months or
to both such fine and imprisonment;
- for more serious offences, to a fine not exceeding the greater of
IR£3,000,000 or 10% of the turnover of the undertaking in the
financial year ending in the twelve months prior to the
conviction or, in the case of an individual, to such a fine or,
at the discretion of the Court, to imprisonment for a term not
exceeding two years or to both such fine and such imprisonment.
There is also provision for fines of up to £15,00 per day for undertakings convicted of a minor offence which continue the contravention.
Company directors, managers and shareholdings who manage company affairs may be personally responsible criminally and liable to be penalised.
2. New Enforcement Powers - The primary method of enforcement of the 1991 Act is through private civil actions rather than by the imposition of fines or other penalties on participants in anti-competitive arrangements or by conferring a right on the Competition Authority to take positive actions against anti-competitive arrangements. The Bill proposes to change this by conferring a right of action on the Competition Authority to take action to restrict the operation of an anti-competitive arrangement and confers the following specific enforcement powers on it:
- a right of action to enable it to commence proceedings against a party to an anti-competitive arrangement in order to restrict the operation of the arrangement;
- a capacity to study and analyze any practice or method of competition affecting the supply and distribution of goods or the pro vision of services which may consist of or include a study or analysis of any development outside Ireland.
In addition, the Bill provides for the appointment to the Competition Authority by the Minister for Enterprise & Employment of a Director of Competition Enforcement. The director is given the power to carry out investigations on his own initiative or as a result of a complaint to him from any person into any anti-competitive arrangements and to make recommendations and give advice to the Competition Authority on instituting proceedings under the Bill.
Comment - The draft Bill has been the subject of a number of concerned comments by legal advisers and from industry. Among the concerns raised have been those questioning the enforceability and the appropriateness of the criminal sanctions which are proposed under the Bill; questioning the appropriateness of the severity of the level proposed of fines and punishments; questioning the appropriateness of the imposition of such substantial fine on employees of companies participating in anti-competitive arrangements and raising concerns as to the introduction of such amendments without undertaking the more detailed review of Irish competition law which commentators believe to be necessary. We have prepared a Briefing Note outlining in more detail the impact of the key changes proposed by the Bill. If you would like a copy of the Briefing Note or further information in relation to the Bill please contact Laura MacDermott or Ken Casey.
- COMPETITION AUTHORITY ISSUE OF DECISIONS WITHOUT PRIOR NOTICE
It is a matter of some concern that in recent months the Competition Authority has issued at least one decision in relation to an agreement notified to it without giving all parties to that agreement the opportunity to comment on the intended decision.
While it has been the usual practice of the Competition Authority to issue a notice outlining its proposed decision (at least one month before the final decision is to be issued) and inviting interested persons to make submissions in relation to the proposed decision, the Competition Authority is not obliged to do so and, in at least one recent case it has issued its decision without giving all parties to the agreement under review the right to make submissions in relation to that decision before it was taken. While the Competition Act, 1991 allows any person aggrieved by a licence or a certificate of the Competition Authority to appeal against the relevant decision, it would appear more appropriate for the Competition Authority to continue to apply a general policy of publishing its intended decisions and allowing interested persons a right to make submissions before the final decision is taken. It appears somewhat out of step with administrative law decisions for an administrative body to make a decision in relation to an agreement without giving all parties to that agreement the opportunity of making submissions in relation to the proposed decision.
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.
