It may be Sunday but competition never rests…Ireland announces its new law

On Sunday, 30 January 2022, Ireland's Enterprise Minister and Deputy Prime Minister, Leo Varadkar TD, announced the unveiling of the Competition (Amendment) Bill 2022.

The new law will supplement, rather than replace, the existing Irish competition and merger control regime. It will ensure that administrative penalties may be imposed by competition agencies and not just by the courts.

Under the proposed law, a fine or penalty of up to the greater of: 

  • €10m; or
  • 10% of the defendant's worldwide turnover (i.e. the value of sales, not profits) 

would be capable of being imposed for a breach of competition law.  

At one level, this is not new because Irish competition law has allowed fines of up to 10% of turnover since 1996 and there have been high fine caps since 2012.  But what is new, and revolutionary, is that the fine (generally described as an administrative sanction) could be imposed by either of the two main competition agencies (rather than the courts), namely:

  • the Competition and Consumer Protection Commission (CCPC) in regard to the economy generally; or 
  • the Commission for Communications Regulation (ComReg) when the issue involves communications

So what is particularly new, in regard to fines, is that these penalties could be imposed through "administrative action" by administrative agencies rather than, as has been the case to date, by the courts if the proposed law is enacted.

Supporters of the proposed law argue that this will lead to greater and tougher enforcement because the agencies can impose these penalties. Consumers and businesses alike need everyone to comply with competition law. While there has been some success in enforcing competition law, the results have been relatively few over the 31 years of civil competition law enforcement and 26 years of criminal law enforcement in Ireland. Some of the cases which the CCPC wanted to take never reached court while some other CCPC cases which reached court were overturned on appeal. Supporters argue that the CCPC (and ComReg) should therefore be put on the same footing as the European Commission and the UK's Competition and Markets Authority (CMA) with the ability to impose fines or administrative sanctions. The genesis of the bill lies in Ireland's obligation to implement into Irish law the European Union's ECN+ Directive which is designed to strengthen the enforcement of competition law by competition agencies across the EU. The opportunity has been taken to give this power to the CCPC and ComReg. The new competition regime will be quite different from the current Central Bank of Ireland regime and any comparison is coincidental. 

Others say that the proposed legislation goes too far. The courts may already impose fines and it is important to have the independence of the courts deciding on whether or not there ought to be a penalty rather than an agency which has invested resources and time in the investigation – for example, in the law generally, it is independent courts rather than the investigating police which impose fines. If the CCPC (or ComReg) impose such penalties, this does not mean that it is the end of the matter; such decisions would be capable of appeal to the courts and the latter may overturn such penalties leading to a long drawn-out process. For example, on 26 January 2022, the European Union's General Court annulled a fine of over €1bn imposed by the European Commission in the Intel case after more than a decade of legal manoeuvring. Similarly, many penalties imposed by the CMA and its predecessor (the Office of Fair Trading) have been overturned by the courts.

There will therefore be much to dissect, debate and decide in the coming months.

For more information on this post please contact Dr Vincent Power, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.

Date published: 31 January 2022