CCPC Issues New Guidance in Anticipation of Commencement of Competition (Amendment) Act 2022
CCPC Issues New Guidance in Anticipation of Commencement of Competition (Amendment) Act 2022
The Competition (Amendment) Act 2022 (Act) is a landmark statute which will introduce significant changes to the Irish competition law regime, including the ability for civil fines to be imposed in respect of breaches of competition law, an updated leniency regime and amended merger control provisions. Signed into law on 29 June 2022, the Act awaits commencement, although the CCPC have indicated that this is expected to occur shortly.
Following a series of consultations during 2022 and in anticipation of commencement, the CCPC have issued a set of policies, procedures and guidelines which provide guidance on how the new regime will operate. These published policies, procedures and guidelines will take effect from the date the relevant sections of the Act are commenced and comprise the following documents:
The Guidance Notice on Choice of Enforcement Regime provides details on the factors to which the CCPC will have regard in determining whether to pursue civil or criminal proceedings for breaches of competition law. In summary, the CCPC will consider the following non-exhaustive set of factors when exercising its discretion:
The Guidance makes it clear that while the CCPC will inform the parties who are the subject of an investigation of the envisaged enforcement route “at as early an opportunity as practicable and appropriate”, it may choose to change the enforcement route at a later stage depending on the evidence gathered.
Guidelines on the determination of administrative financial sanctions and periodic penalty payments
These Guidelines detail the methodology for the calculation of administrative financial sanctions in respect of:
infringements of competition law
breaches of procedural requirements or a failure to comply with commitments, prohibition notices or remedies
They also explain the method of calculation applicable to periodic penalty payments.
For infringements of competition law, the Guidelines indicate that a basic amount should be determined by calculating a proportion of 0-30% of the value of the business’ sales to which the breach relates (with this proportion to be assessed by reference to factors such as the nature of the breach, the combined market share of all of the businesses concerned and whether the relevant agreement has been implemented) and multiplying this by the duration of the business’ participation in the breach (rounded to the nearest half year). In the case of cartels (and potentially other infringements) a sum of 15-25% of the value of sales should also be included in the basic amount irrespective of the duration of the business’ participation in the breach.
The basic amount may then be adjusted upwards or downwards by reference to certain aggravating/mitigating factors. The total adjustment should not exceed 50% and the adjustment resulting from any one factor should not exceed 30% of the basic amount.
In addition, the amount of an administrative fine may be adjusted upwards to ensure that it has an appropriate deterrent effect. Reductions may also be possible where, for example, the CCPC has decided to grant leniency to a business under its ALP, where there has been a settlement or where the business would otherwise be forced to cease trading. This position is summarised in the table below:
Determination of Basic Amount
Percentage value of sales (0 - 30%) x Duration in years (rounding up to the nearest half year, with periods of less than six months counted as half a year and periods longer than six months but shorter than one year counted as a full year)
Additional sum for cartels and other infringements (15 - 25% of value of sales)
Adjustment of basic amount
+/- 30% of basic amount per factor
+/-50% of basic amount overall adjustment
(e.g. recidivism, intent, absence of internal mechanisms or procedures, coercion)
(e.g. steps taken to end infringement, limited involvement, substantial cooperation outside leniency/immunity)
Increase for deterrence (if relevant)
Legal maximum amount
Greater of: 0-10% of worldwide turnover / €10m
Possibly further decreased by
Inability to pay
(Case by case consideration)
(As set out in ALP)
The ALP sets out the circumstances in which a business may be granted leniency for participation in a cartel. Subject to meeting prescribed requirements, the first participant in a given cartel that applies for leniency may be granted immunity from administrative financial sanctions. Immunity cannot be granted to a business that took steps to coerce another business to join a cartel or to remain in it.
A second or subsequent participant in the same cartel may be granted a reduction in administrative fines of up to 50% where certain criteria are met, including that the evidence submitted represents significant added value relative to the evidence already in the CCPC’s possession. For the first business to provide significant added value a reduction of 30-50% will be available, for the second business this will be 20-30%, and for any subsequent business there will be a reduction of up to 20%.
The Act also allows the CCPC to put in place a leniency programme for breaches other than cartels. The CCPC has chosen to exercise this power by implementing a leniency policy relating specifically to resale price maintenance (RPM). The ALP makes it clear that the business that instigated the RPM will generally not be eligible for immunity.
Guidance Note on Interaction between the CIP and the ALP
The CCPC’s Guidance Note on Interaction between the CIP (which allows for applications for immunity to be made in the case of criminal cartel offences) and the ALP provides insight on the co-existence of these policies. The CCPC notes that in the majority of cases, it expects that businesses will want to apply under both the CIP and the ALP and it encourages them to make simultaneous applications under both programmes in order to obtain a marker and/or a place in the queue (as applicable).
The CCPC also notes that it anticipates that most investigations into alleged cartels will start off as investigations to the criminal standard of proof. However, this may change as it reserves the right to decide at any time that the alleged cartel is more suitable for administrative enforcement action or the DPP may decide not to grant immunity as the matter is not suitable for criminal prosecution. In either of these scenarios, (and assuming that the applicant has made a simultaneous application under the ALP and holds a marker), the matter will be progressed further solely as a leniency application under the ALP.
Access to File Procedures
The CCPC’s Access to File Procedures provide guidance on the situations in which access to the file may be granted (e.g., in the context of a Phase 2 merger investigation or an investigation into a suspected breach of competition law). An enumerative list of documents setting out the content of the file will be provided no later than 2 working days following issuance of an Assessment or Statement of Objections/Investigation Report and the relevant party must then indicate in writing to the CCPC which of the accessible documents they wish to inspect.
Access to documents on the file is subject to such redactions as the CCPC may judge necessary and appropriate in order to protect commercially sensitive information, protect the rights of the parties or any other person, or for any other good and sufficient reason. Internal documents of the CCPC will also generally be excluded from the file.
Mergers and Acquisitions Procedures
The Mergers and Acquisitions Procedures outline the procedures which will be followed by the CCPC when assessing mergers or acquisitions once the Act is commenced. The Procedures deal with:
mandatorily notifiable transactions
those which are voluntarily notified either pre- or post-implementation
those which are neither mandatorily notifiable nor voluntarily notified but which are “called in” by the CCPC. Notable guidance provided in the Procedures includes the following:
Where transactions are not mandatorily notifiable but may have an effect on competition in the State, businesses are encouraged to approach the CCPC with a view to engaging in potential pre-notification discussions.
The CCPC reserves the right to reject any notification as void (e.g., because full details have not been provided) at any stage during the merger review process, including without prior engagement with the notifying parties.
Following the commencement of the Act, the CCPC will have the power to issue an RFI to any of the businesses involved in a merger or to any other person or business that it considers may have information relevant to its assessment.
Where a merger has already been put into effect, and the CCPC finds that it will substantially lessen competition, it may decide that: (i) the merger should be unwound/dissolved or (ii) where this is not possible, that steps should be taken to restore as far as practicable the pre-merger situation.
For further details of how the Act and the associated CCPC policies, procedures and guidelines may affect your business, please feel free to contact any member of A&L Goodbody’s EU, Competition & Procurement team.