On 28 February 2020, Ireland's Competition and Consumer Protection Commission (CCPC) announced that it had closed its investigation into alleged anti-competitive practices in the "bagged cement sector".
CCPC's Power and Role
The CCPC is the principal competition agency in Ireland. It has substantial powers to investigate alleged breaches of competition law. There are however two aspects of these powers which are worth noting.
First, the CCPC may conduct inspections or so-called dawn raids but it does not have the power to conduct such procedures without prior court approval and must then comply with all the relevant laws.
Secondly, the CCPC also lacks the power to impose fines or prison sentences because the power to do so is confined to the courts – this is due to the fact that Irish constitutional law provides that judicial functions must be exercised by the courts and not administrative agencies such as the CCPC. If the CCPC believes that there is a breach then it may itself institute civil proceedings in the courts seeking an injunction and/or a declaration that there was a breach. If the CCPC believes that there is a breach of the criminal law then it may institute a summary criminal prosecution (i.e. a trial without a jury) or refer the matter to the Director of Public Prosecutions and if the latter believes that there is a criminal case to answer then she would bring a prosecution in the criminal courts on indictment (i.e. a trial before a jury and the charge is seen as a more serious one) against the relevant defendants.
The cement sector in Ireland has attracted attention from competition agencies over time. The background to this particular investigation was that it followed, according to the CCPC: "concerns about alleged exclusive purchasing arrangements in the bagged cement sector, including exclusive rebates, target rebates or other exclusionary practices."
The investigation was a long one. CCPC has confirmed that it had commenced this investigation in 2014 and six years later, it has closed its investigation.
The CCPC has said that during the course of the investigation, it took various steps including:
(a) conducting unannounced searches at a number of premises (i.e. inspections or dawn raids)
(b) issuing a number of witness summonses and conducting summons hearings under sections 18(1)(a) to (c) of the Competition and Consumer Protection Act 2014 (the "2014 Act")
(c) issuing a number of requirements for information pursuant to section 18(1)(d) of the 2014 Act
(d) conducting interviews with potential witnesses
(e) "undertaking field work, including anonymous visits to bagged cement distributors."
The CCPC's investigation resulted in litigation before the Irish courts on the legality (or otherwise) of the CCPC's inspection conducted at the premises of one particular undertaking on 14 May 2015. In particular, the litigation turned on whether the CCPC could lawfully review electronics records, copied during the inspection, of a senior employee. The Irish High Court and Supreme Court decided that the CCPC could not review those particular records.
Outcome of the Investigation
The CCPC says that it reviewed only those materials which it was lawfully entitled to do so (i.e. not the records which were the subject of the successful litigation challenges) and, presumably, other evidence. It then took the decision that it could close its file. (The CCPC reserves the right to reopen investigation files should new information be bought to its attention).
While the CCPC published a media release indicating that the matter has closed, it has not (at the time of writing, 2 March 2020) published any discussion of its reasoning. The CCPC's predecessor, the Competition Authority, occasionally did so and it was a useful contribution to understanding the agency's thinking on particular issues.
This investigation took six years. Some might say that it was delayed because of litigation over the legality of aspects of the inspection. This is not however a complete explanation for two reasons. First, that litigation took 19 months or so from the institution of the proceedings in the High Court until the Supreme Court judgment. Secondly, it is not unreasonable to anticipate that undertakings, associations of undertakings and those potentially subject to competition law will vindicate their positions. An investigation lasting six years is a long investigation and it may well be too long an investigation.
If the CCPC had found evidence in this case to form the view that there had been a breach of competition law then the court proceedings which would follow on could have also taken a number of years. Therefore, from the commencement of the investigation to the completion of the civil or criminal case could have taken a decade or longer. Changes need to be made to the process so as to render the regime more expeditious.
Conferring on the CCPC the power to impose fines would not expedite the process because there is a real risk that as soon as the CCPC imposes fines then such fines would be appealed anyway to the courts (with further appeals being taken by the losing side). Such an investigation, coupled with appeals and also a possible preliminary reference to the Court of Justice of the European Union in certain circumstances means that the process could be even longer. (One could anticipate, for example, that the six year investigation in the present case which led to the case being closed would have been even longer if the CCPC formed the view that there had been breaches and the CCPC wanted to impose fines.)
It may well be that one of the lessons from this case is that the CCPC needs to be more precise in the data which it reviews and copies on inspections. This would minimise the ability of undertakings and associations of undertakings to challenge successfully the CCPC's inspections.
The CCPC made an interesting remark in its media release about the case. The CCPC said that it had undertaken "field work, including anonymous visits to bagged cement distributors". One could anticipate interesting issues arising in any subsequent litigation about such "anonymous visits" and the admissibility of such evidence had there been litigation alleging a breach of competition law.
Without commenting in any way on the merits of this case, the CCPC is to be congratulated for closing a file after six years and finding that there was no issue. Having spent so long on a case, many agencies could have been tempted to find that there was some breach (however small) and use that to justify their work over many years.