Irish Competition Law – Some themes from the CCPC Annual Report 2018

The 2018 annual report (Report) of Ireland's Competition and Consumer Protection Commission (CCPC) has been laid before the Houses of the Oireachtas (the Irish parliament) and is expected to be published by the CCPC shortly.

Among the themes contained in the Report are:

  • merger control
  • enforcement of competition law
  • the ECN+ Directive
  • the Geo-blocking Regulation

Merger control

Acquisitions which meet the Irish merger control turnover thresholds or which are media mergers under the Competition Act 2002 (as amended) (Competition Act) or which constitute media mergers under the Competition Act (and are otherwise not notifiable to the European Commission (Commission) under the EU Merger Regulation) must be notified to the CCPC for prior approval (and if it is a media merger under the Competition Act it must subsequently be notified to the Minister for Communications, Climate Action and Environment for approval).

2018 saw the equal highest number of merger notifications to the CCPC (98) under the Competition Act regime with a 36% increase in notifications compared to 2017. Six merger notifications assessed in 2018 resulted in a range of structural and behavioural commitments offered by the parties to obtain CCPC approval either in Phase 1 or Phase 2 of the CCPC's assessment process (i.e. BWG/4 Aces, Trinity Mirror/Northern Shell, Uniphar/SISK Healthcare, Enva/Rilta and Oaktree and Alanis Capital/Lioncor). Three transactions which were notified to the CCPC in 2018 (Pandagreen/Knockharley Landfill, Berendsen/King's Laundry and LN-Gaiety/MCD Productions) resulted in extensive Phase 1 or Phase 2 assessments in 2019 and were approved on the basis of a range of commitments offered by the parties to obtain CCPC approval. 

The CCPC stated that it issued a Phase 1 decision in an average of 24 working days, which is consistent with its 2017 timelines. The CCPC noted that:

  • real estate was the most active sector for merger activity
  • information and communications, healthcare and financial and insurance services were prominent
  • there was increased merger activity in both the motor sector and in the entertainment and recreation sector

The CCPC opened a consultation for a simplified merger procedure which is partly based on the requirements for a short-form notification under the EU Merger Regulation.

The thresholds for a compulsory merger notification to the CCPC were increased at the start of 2019 and there has been a reduction in the number of notifications made to the CCPC so far in 2019 compared to the same period in 2018.

Enforcement of competition law in Ireland - Bid-rigging

Under the Competition Act, any undertaking which enters into an anti-competitive agreement that is prohibited by the Competition Act or by Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) is guilty of an offence. Anti-competitive agreements between competitors can lead to substantial fines (up to the greater of €5 million and 10% of turnover) and imprisonment for individuals (up to 10 years)) – only the Irish Courts can impose these sanctions. One of the areas of priority for the CCPC is the investigation of bid-rigging by competitors. Bid-rigging is a form of cartel which distorts the competitive tender process and can result in artificially high-priced bids winning the contract.

Ireland’s first conviction for a bid-rigging cartel offence was imposed in May 2017 by the Central Criminal Court when Aston Carpets and Flooring (Aston) and an individual pleaded guilty to implementing and taking part in a bid-rigging agreement in the procurement of flooring contracts for offices of certain international companies between 2012 and 2013. This followed an investigation by the CCPC and a subsequent prosecution by the Director of Public Prosecutions (DPP). Aston was fined €10,000. The individual was fined €7,500, given a term of imprisonment of three months (suspended for a period of two years) for impeding a prosecution and disqualified from acting as a company director for five years. One individual was granted immunity by the CCPC in return for co-operation regarding the investigation. The sentences imposed were appealed by the DPP on the basis that the DPP regarded them as unduly lenient. In June 2018, the Court of Criminal Appeal increased the fine imposed on one of the individuals to €45,000 (but did not change the fine on Aston).

Separately, the CCPC has developed a new bid-rigging information booklet and checklist for businesses involved in procurement, highlighting signs of collusive tendering and providing information on steps that can be taken to mitigate them 

The ECN+ Directive ((EU) 2019/1)

Transposition of the ECN+ Directive is a priority area for the CCPC. The ECN+ Directive will bring the Irish system (and possibly by extension the CCPC) in line with other EU countries by allowing non-criminal financial penalties for breaches of competition law. The implementation of the ECN+ Directive in Ireland is on-going.  In 2018, the CCPC began to assist its parent Government Department, (the Department of Business, Enterprise and Innovation (DBEI)), in the transposition of the ECN+ Directive into law in Ireland. This has been a continuing process in 2019.

The ECN+ Directive essentially strengthens the current powers of the national competition authorities of the Member States (including the CCPC) so that they can more effectively apply Articles 101 and 102 TFEU alongside the Commission. Powers of investigation and the ability to issue non-criminal fines for breaches of Articles 101 and 102 TFEU are among the powers which will be drawn from the ECN+ Directive (as well as the harmonisation of leniency programs) though much will ultimately depend on how the ECN+ Directive is transposed in Ireland.

The Geo-blocking Regulation ((EU) 2018/302)

In December 2018, the new Geo-blocking Regulation took effect. The Geo-blocking Regulation is designed to ensure that consumers in the EU will have the same rights to access a trader’s goods and services on the same terms, irrespective of their location.

The CCPC is the enforcement body. During 2018, the CCPC worked with the DBEI and the Commission to prepare for the commencement of the Geo-blocking Regulation in Ireland.

Geo-blocking occurs when online sellers apply barriers and impose restrictions to consumers on the basis of their nationality or place of residence. Some examples are:

  • blocking access to websites across borders
  • denying the possibility to complete an order, to purchase goods or to download content when accessing a website from abroad
  • denying delivery or shipment across border
  • providing different prices and conditions depending on nationality, country of residence or location of the customer

A breach of certain provisions of the Geo-blocking Regulation is an offence and can lead to a fine and imprisonment. The CCPC has developed a guide for businesses to help them comply with the Geo-blocking Regulation.

Comments

On enforcement, the CCPC remains committed to investigating serious anti-competitive behaviour and it remains to be seen whether the CCPC will rely on immunity applications or rely more on complaints and launch its own pro-active investigations. The private motor insurance investigation by the CCPC remains ongoing though this investigation may come to a close in 2019. 

On mergers, there will likely be a material reduction in notifications to the CCPC compared to 2018 as a result of the increase in merger thresholds. Separately, one undertaking has been prosecuted in the District Court in 2019 for failure to notify a notifiable transaction prior to completion – there may be other such procedural merger control investigations in 2019. ECN+ will be an area of significant interest to the CCPC in 2019 and the CCPC will likely want to have the power to impose non-criminal fines itself (which would result in the CCPC also being granted the power to make a finding of a breach of EU and Irish competition law (something that currently only the Irish Courts can make)). The interaction between the DBEI and the CCPC will be important to the final shape of the transposition of the ECN+ Directive in Ireland.

On geo-blocking, the CCPC is the enforcement body in Ireland and is likely to want to show its commitment to the application of the Geo-blocking Regulation in Ireland in 2019.

For queries or for further information on this topic please contact Alan McCarthy, Partner, EU, Competition & Procurement, or any other member of A&L Goodbody's EU & Competition team. 

Date published: 2 August 2019