The Competition (Amendment) Act 2022 (Act) was signed into law on 29 June 2022. The Act gives the two Irish competition authorities, the Competition and Consumer Protection Commission (CCPC) and the Commission for Communications Regulation (ComReg), significant additional enforcement powers. In this regard, the Act implements Directive EU 2019/1 (ECN+ Directive). The Act also gives the CCPC additional powers relating to mergers and acquisitions. It is anticipated that the Act will commence on 1 August 2022.
In this article we have set out some of the main features of the new investigative process introduced by the Act.
New Investigative Process
Both the CCPC and ComReg can investigate suspected breaches of competition law.
If the CCPC (or ComReg) has formed the view that an infringement of competition law may have occurred or may be occurring or an undertaking has failed to comply with commitments, structural or behavioural remedies or a prohibition notice, it must issue a Statement of Objections (SO) to the relevant undertaking. The SO must set out the reasons and inform the undertaking of its right to make submissions in response to the SO. The CCPC can then:
- decide to continue its investigation;
- close the investigation without further action;
- agree legally binding commitments with the undertaking under investigation; or
- refer the matter to an Adjudication Officer (AO) for determination.
Where the CCPC makes a referral to the AO, it must prepare a full investigation report and the relevant undertaking must be given access to this report, including any material relied upon. Where a settlement has been reached between the CCPC and the relevant undertaking (which can include fines or structural or behavioural remedies), this must be referred to the AO for an order of consent together. The CCPC can enter into commitments with the relevant undertaking at any time and can withdraw a referral to the AO.
The Act also gives the CCPC the right to request a competition authority of another EU Member State to carry out an inspection, interview or other fact-finding measure on its behalf.
The Act provides for the nomination of AOs by the CCPC (and ComReg) for appointment by the Minister. AOs must be independent in the performance of their functions and the CCPC has already indicated that the role of AO will not be fulfilled by CCPC staff or members.
AOs have the same powers as a High Court judge hearing civil proceedings and can:
- arrange for further written submissions;
- request further information from any person; and
- conduct oral hearings, including summoning witnesses, taking evidence on oath and compelling the production of records.
If the AO considers that, on the balance of probabilities, there has been a breach of competition law, the AO can:
- issue a finding of a breach of competition law, of a procedural requirement, commitments, structural or behavioural remedy or a breach of a prohibition notice;
- impose fines and periodic penalty payments;
- impose structural or behavioural remedies, including the sale of a business, assets or property, a requirement to modify or cease certain conduct, to grant access to assets or information or to prevent the flow of competitively sensitive information.
While the AO decides on the amount of the fine to be imposed, this must be confirmed by the High Court. The High Court must do so unless there has been an error of law or it finds that the sanction imposed was manifestly excessive. Undertakings can also appeal decisions of the AO to the High Court, but the High Court can only quash or vary the decision of the AO if there has been a serious and significant error of law or fact or a series of minor errors of law and fact which, taken together, amount to a serious error or a breach of fair procedures.
Power to Issue Prohibition Notice
The Act introduces the power for the CCPC to issue prohibition notices at any time during an investigation where there is a risk of "serious and irreparable harm to competition" due to an ongoing infringement. The Notice can include directions as to measures to be taken to remedy any suspected infringement of competition law and the date by which these measures have to be taken.
The Act applies to conduct since 4 February 2021, which is the date by which the ECN+ Directive should have been transposed into Irish law. Where an investigation relates wholly to conduct that took place before 4 February 2021 or where an investigation has been opened and is pending prior to commencement of the Act, the CCPC's previous powers will apply.
The Act places powerful new sanctions at the disposal of the CCPC and ComReg which are similar to powers held by other competition authorities in the UK and Europe. This increase in enforcement powers for breaches of competition law in Ireland has been long awaited and is to be welcomed. The theory is that changes in behaviour will only occur when effective deterrents, including the power to impose fines, exist.
The Act amounts to a sea change in Irish competition law and the scale and strength of the new powers, both in terms of merger control and competition enforcement, should not be underestimated. It is expected to lead to a much more active enforcement regime, though it may take time for some of the new enforcement powers to 'bite'. This is because the changes introduced by the Act only apply to conduct after 4 February 2021. In addition, due to the complexity of the Act, there are likely to be challenges to the exercise of these new powers.