Irish Competition (Amendment) Act 2012: Strengthening Competition Law Enforcement in Ireland

• Author: Amy Dunne
• Position: LLB (Trinity College Dublin), MA (European and International Law) (Candidate)
• Pages: 1-23

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IRISH COMPETITION (AMENDMENT) ACT 2012: STRENGTHENING

COMPETITION LAW ENFORCEMENT IN IRELAND

Amy Dunne*

A INTRODUCTION

The inception of a scheme of market regulation within the Irish legal system originated in the

passage of the Restrictive Trade Practices Act1953,1 a statute which was firmly grounded in

familiar control of abuse principles prevalent at the time.2 Upon its debut, a Minister of the

Irish Parliament responsible for the legislation, Seán Lemass, informed Dáil Éireann (Irish

House of Parliament) that a prohibitions based system modelled on USlaw had been

considered but decidedly rejected.3 It is now purported that, since 1953, the Irish competition

system has infactveered closer to the American system owing largely to the introduction of

criminal sanctions for transgressions of Irish competition law.4 This innovation occurred at a

steady pace on the periphery of Europe until itwas accelerated in 2011 far ahead of the

creeping criminalisation beguiling other Member Statespresently.5Aspart of the response

mechanisms employed by the EUin the wake of the Euro Debt Crisis,6 the Irish Government

undertook to give effectto the EU/IMF/Ireland Memorandum of Understanding on Specific

Economic Policy Conditionality 2011(the EU/IMF/Ireland MoU).7 Most pertinent for the

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*LLB(TrinityCollegeDublin),MA(EuropeanandInternationalLaw)(Candidate).

1RestrictiveTradePracticesAct1953.

2PatrickMassey,‘WhathasIrishCompetitionPolicyAchieved?’(CompeconLimited,DublinEconomics

WorkshopAnnualEconomicPolicyConference,Kenmare,15October2011)2.

3Massey(n2)2.

4GeraldFitzGerald,DavidMcFadden,‘Filling a gapinIrishCompetitionLawEnforcement:TheNeedfor A

CivilFinesSanction’ 9 June2011,CompetitionAuthority,1.

5KenDaly,‘CartelsandDeterrence - CreepingCriminalisationandtheClassActionBoom’(2007)Bloomberg

EuropeanBusinessLawJournal318.ItisnotedthatnineteenofthetwentyeightMemberStatesoftheEU,

individualscancurrentlybesanctionedforinfringementsofcompetitionlaw.FourteenMemberStateshave

introducedcriminalpenalties forcompetitionlawinfringements,sometimesparallelto a systemof

administrativefines.See,further,MarcoSlotboom,‘IndividualLiabilityforCartelInfringementsintheEU:An

IncreasinglyDangerousMinefield’(KluwerCompetitionLawBlog25April2013)

<http://kluwercompetitionlawblog.com/2013/04/25/individual-liability-for-cartel-infringements-in-the-eu-an-

increasingly-dangerous-minefield/>accessed25February2014

6Commission,EconomicandFinancialAffairs,‘EUResponsetotheCrisis – EmergingStrongerfromthe

Crisis:TheEuropeanVision’COM(11September2012)

<http://ec.europa.eu/economy_finance/crisis/index_en.htm> accessed25February2014

7MemorandumofUnderstandingbetweentheEuropeanCommissionandIreland(17May2011)subsequently

updated28July2011,9.

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present analysis, aspart of itsconditionality, the EUnecessitated8 that Ireland further

implement an escalation in the terms of incarceration for breaches of competition; which in

2012 have brought criminal sanctions for infractions of competition lawin Ireland formally

on par with the American antitrust lawin terms of penal sanctions.

This analysis will examine the rationale and utility of an increase in criminal sanctions inan

already developed and functioning competition regime9 that isfar ahead of its contemporaries

in the growing trend to incarcerate competition law offenders. Therefore, as a point of

departure, it must be considered how wellinfact the existing system wasfunctioning until

the crucial year of 2011. A consideration of the functioning of a competition enforcement

system cannot be divorced from a consideration of the general principles that govern the

administration of justice inthe relevant jurisdiction.10Todate, inIreland, these principles of

administration have provided cartel offenders with the prospect to escape imprisonment

under the provisions of the Probation of Offenders Act 190711 (the Probation Act).12 The

marginal benefit of doubling the criminal sanctions inherent in the Competition Act200213is

therefore questioned in a legal culture in which, until the recent dicta of McKenchie J,14 cartel

offenders have escaped imprisonment due the prevailing ethos of non-application of the most

stringent sanctions of the legal system to white collar crime. Although the possibility to avail

of the provisions of the Probation Act have now been removed under the Competition Act

201215 and itis expected that the ‘second generation’16 of cartel offenders in Ireland willface

the full rigours of increased criminal sanctions, itwillbe considered whether there is a

realistic prospect of these sanctions strengthening competition law enforcement in Ireland as

envisioned. Finally, asthe additional increase ismandated by EU/IMF/Ireland MoU

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8 ibid‘GovernmentshallbringforwardlegislationtostrengthencompetitionlawenforcementinIrelandby

ensuringtheavailabilityofeffectivesanctionsforinfringementsofIrishcompetitionlawandArticles101and

102oftheTreatyontheFunctioningoftheEuropeanUnionaswellasensuringtheeffectivefunctioningofthe

CompetitionAuthority.’AspertheRegulatoryImpactAnalysis,aswillbediscussedbelow,theGovernment

opinedthatithadnootheravenueopentoittofulfilthiscommitmentbut to increasesanctionswithinthe2002

Act.

9Irelandhasbeenplauditedinternationallyonthestrengthofitscompetitionregime: D Purcell, ‘Competition

policy,lawandculturein2011’ (CompetitionAuthority,CompetitionAuthority20thAnniversaryConference,

Dublin) <http://www.tca.ie/images/uploaded/documents/2011%20Conference%20-

%20Declan%20Purcell%20paper.pdf> accessed25February2014

10DirectorGeneralofEuropeanCompetitionAuthorities‘PrinciplesforLeniencyProgrammes’,preparedfor

ECAmeetinginDublin3, 4September2001.

11ProbationofOffendersAct1907,chXVII.

12ProbationofOffendersAct1907.

13CompetitionAct2002.

14DPP v DuffyandDuffyMotors(Newbridge)Ltd[2009]IEHC208[67]‘[T]hefirstgenerationofcarteliers

haveescapedprisonsentences. I cansaythatthesecondwillnot.’

15Competition(Amendment)Act2012.

16DPP v Duffy[2009]IEHC208.