The Irish Competition (Amendment) Bill – proposed developments and the new gun-jumping provision
Irish competition law is mainly found under the Competition Act 2002 (as amended) (2002 Act). Irish competition law, including Irish merger control, is based on EU competition law (including EU merger control).
The Irish Competition (Amendment) Bill (Bill) - yet to be published but expected shortly and the contents of which have been sign-posted by the Department of Enterprise, Trade and Employment; should largely reflect the 2019 ECN+ Directive. The Bill will make some of the most significant changes to Irish competition law since 2002. The Bill will add extensive powers to the main Irish competition agency, i.e. the Competition and Consumer Protection Commission (CCPC).
As well as adding a specific competition offence of ‘bid-rigging’, the Bill is likely to provide for the CCPC to:
- make a legally-binding decision that there has been a breach of EU and Irish competition law
- impose non-criminal fines and periodic payment penalties (though probably affirmed by the Irish Courts)
- impose interim measures in the course of an EU or Irish competition law investigation
- in investigations/inspections:
- carry out video and audio surveillance
- require interception and recording of electronic communications, and
- seal premises
- in merger control:
- bring prosecutions regarding gun-jumping offences in the District Court (see below for more details)
- accept voluntary notifications where a merger has already been completed
- impose interim orders on transactions in relation to voluntarily notified mergers
- unwind/restore status quo of a completed merger if it is found by the CCPC that it would substantially lessen competition in Ireland
- send formal requests for information to third parties
- Institute a leniency programme for cartels to grant immunity from non-criminal fines as well as a reduction in such fines for undertakings that do not qualify for immunity
The Bill applies to EU competition law and Irish competition – there will be procedural safeguards built-into the Bill to take account of certain Constitutional limitations on additional CCPC powers in the context of the application of Irish competition law only (such as in relation to the imposition of civil fines and CCPC decision-making procedures). The enforcement of EU and Irish competition law will continue to be assessed under criminal law – the practical demarcation between the new civil law powers under the Bill and the on-going application of the criminal law dimension of EU and Irish competition law in Ireland is, as yet, unclear.
The power of the CCPC to prosecute gun-jumping offences on a summary basis
The intention of the proposed provision under the Bill is to allow the CCPC to take its own summary prosecutions for gun jumping offences to reduce the burden on the Director of Public Prosecutions (DPP) and to increase the enforcement of the gun-jumping provision generally in Ireland.
Under Irish competition law, mergers or acquisitions which reach certain financial thresholds in the State, must be notified to the CCPC. Such notifiable mergers or acquisitions cannot be put into effect without obtaining clearance from the CCPC. Failure to notify any such merger or acquisition or putting it into effect before clearance by the CCPC is referred to as gun-jumping. Currently, the offence of gun-jumping (i.e. failing to notify a transaction that reaches the notification thresholds and failing to respond to formal requests for information by the CCPC) under Section 18(9) of the 2002 Act can only be prosecuted by the DPP in the Courts by way of fines of up to €250,000. The CCPC does not have the power to bring a summary prosecution in respect of this offence – the Bill would change this.
Gun-jumping also occurs if the parties to a merger have notified the CCPC but do not wait for CCPC approval and implement the transaction in advance (e.g. exchange competitively sensitive information or obtain any powers to control the target) – this is prohibited and can separately lead to consequences under the 2002 Act for example as an anti-competitive agreement. Also, if parties implement a merger, subsequently notify the CCPC and the CCPC then reaches a determination which is inconsistent with the implementation then this may be an offence in breach of Irish merger control law. In addition, a merger put into effect without prior approval of the CCPC is void under Irish law.
Internationally, including in the EU, competition authorities are increasing their efforts to tackle gun-jumping in an attempt to deter early, unlawful implementation of transactions requiring prior merger control clearance. For example, the Court of Justice upheld the European Commission's decision to fine Altice for gun-jumping in relation to its acquisition of Portugal Telecom in 2015. The COJ reduced the original fine of €124.5m by 5%. the Bill reflects this wider international focus.
While the precise parameters of the Bill are yet to be published and details of the procedures that the CCPC will be required to carry-out in applying its new powers are still to be disclosed, we have a good sense of the overall shape of the new and strengthened position of the CCPC in enforcing competition law in Ireland. Assuming that the CCPC is granted the power to apply for gun-jumping prosecutions in the District Court, this will make the CCPC more agile in tackling parties who complete mergers that should have been notified under the 2002 Act.
For more information on this topic please contact Alan McCarthy, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.
Date published: 29 November 2021