Competition (Amendment) Act 2022 – Major Changes to Competition Law in Ireland

On 29 June 2022, the Competition (Amendment) Act 2022 was enacted into law in Ireland. This signals a major change in competition law in Ireland, with the Act enhancing the powers of the Competition and Consumer Protection Commission (CCPC) and implementing the 2019 ENC+ (EU) 2019/1 Directive. This article intends to outline several key changes provided for in the Act.

Power to Adopt Civil Fines

The new Act grants the CCPC the power to seek administrative financial sanctions for breaches of competition law. This power was previously thought to be difficult to grant the CCPC given there is Constitutional provision that justice must be administered in the Irish Courts. The new Act addresses this difficulty by the creation of an “Adjudication Officer” who will review the CCPC’s investigation of the potential breach and may conduct oral hearings on the matter. If the Adjudication Officer finds the company to be in breach of competition law, they can impose a fine on the company for up to the value of 10 million euro or 10% of their turnover.

New Leniency Scheme for Civil Fines

The 2022 Act also introduces a new leniency scheme to coincide with the new civil fines. If a company is “first in line” to notify the CCPC of a potential breach of competition law, they can grant an immunity from fines. For those “second in line” a reduction of up to 50%, and a reduction of up to 30% for the “third in line”. Any later in line companies may obtain a fine reduction of up to 20%. It should be noted however, that the already existing cartel immunity for criminal sanctions is still in operation.  This may cause some issues for both the CCPC and those determining whether to voluntarily disclose a breach of competition law as regards which route to follow.

Power to investigate below threshold mergers

One of the major changes the Act brings into force is that the CCPC now has the power to require parties undergoing a merger to notify them of such if there is a perceived effect on competition in an Irish market. Previous to this, the parties only had to notify the CCPC where the aggregate turnover in the State of the undertakings involved is not less than €60,000,000, or if the turnover in the State of each of two or more of the undertakings involved is not less than €10,000,000. How exactly this will operate remains to be seen and guidance from the CCPC on how it intends to enact this power would be most welcome.

Increase to criminal fines

Another change the 2022 Act brings in is that it increases the criminal fines for offences relating to cartels. Following conviction, the courts may now fine an entity up to 50 million euro or 20% of their annual turnover. This will increase Ireland’s sanctions to one of the highest in Europe. As there is now the possibility of CCPC issuing civil or criminal fines, there is the potential that the scheme can become overly complicated with both criminal and civil sanctions being an option.

New power of surveillance

Another new power granted to the CCPC under the 2022 Act is an increase to their powers of surveillance. The CCPC now have the power to monitor and record activities or the communications of a person or group. These new powers can only be granted by the High Court if the CCPC can prove that there are reasonable grounds to believe that such measures are necessary.

Conclusion

In summary, the enactment of the Competition (Amendment) Act 2022 signals a major change in competition law in Ireland. Of particular note should be the CCPC’s new power to investigate mergers that fall below the current threshold for mandatory notification. Going forward, there should be careful consideration on documents relating to the merger to ensure they would not be found to be in breach of competition law. Further to this, given the increased power set of the CCPC, it remains to be seen whether it has the adequate resources to avail of these powers.

How We Can Help

If you have any queries or concerns, or would like to discuss the above in further detail, please contact Eimear Grealy, in the Corporate Department of BHSM on +353 (0)1 440 8300 or egrealy@bhsm.ie for further information.

This article is for general information purposes. Legal advice must be obtained for individual circumstances. Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.