Investigation and settlement

Legal representation

Under which circumstances would the company and officers or employees need separate legal representation? Do the authorities require separate legal representation during certain types of investigations?

Both companies and individual directors can be prosecuted for infringements of the 2002 Act, and there have been a number of cases in which individual company directors were prosecuted for their role in cartels. While the High Court has previously held that an absolute ban imposed by the Competition Authority on lawyers representing multiple parties in cartel proceedings was unconstitutional, there are no specific rules (other than the usual rules in relation to lawyer conflicts of interest) regarding the circumstances in which companies and their officers or employees require separate representation. It is for individual companies and officers or employees to establish whether their interests are aligned or not, and whether separate representation may be appropriate. This assessment may evolve as the CCPC’s investigation moves forward.

Dawn raids

For what types of infringement would the regulatory authority launch a dawn raid? Are there any specific procedural rules for dawn raids?

As can be seen from the wide variety of sectors in which the CCPC (and its predecessor) has initiated dawn raids, there are no restrictions as to either the type of infringement or the industry sector in which the CCPC can conduct unannounced inspections. While dawn raids have not been used as frequently in recent years (potentially due in part to a legal challenge to the CCPC’s inspection of the premises of Irish Cement Limited in May 2015, which has been successfully upheld by the Irish Supreme Court), dawn raids remain an important part of the CCPC’s regulatory enforcement toolkit. Some 20 unannounced inspections took place in April 2017, all in connection with the CCPC’s investigation into the procurement of public transport services in the Munster and Leinster regions of Ireland. CCPC officials also assisted the European Commission in carrying out unannounced inspections at the premises of companies active in motor insurance in Ireland in July 2017.

What are the company’s rights and obligations during a dawn raid?

Section 37 of the Competition and Consumer Protection Act 2014 (the 2014 Act) sets out the legal basis for dawn raids. Section 37 provides that pursuant to a valid warrant issued by a district court judge, authorised officers of the CCPC may conduct searches of, and seize evidence from, companies and individuals at business premises or, if authorised to do so, in private homes. Dawn raids can only be conducted on foot of a warrant. Before issuing a warrant, a district court judge must be satisfied by information on oath from an authorised officer that there are reasonable grounds for suspecting that evidence of, or relating to, the commission of an offence under the 2002 Act is to be found in the target location of the raid. The sworn evidence of the authorised officer, therefore, has to set out the factual basis underpinning the request for the warrant (although it should be noted that the CCPC’s stated position is that companies that are the subject of a raid do not have the right to see this sworn evidence at any point prior to, or during, the dawn raid itself).

The CCPC may be accompanied by members of the Irish police force (An Garda Síochána) during the dawn raid, and may use reasonable force if necessary to enter premises. The scope of the raid is circumscribed by the terms of the search warrant; however, these will usually be issued in relatively broad terms. The 2014 Act provides that authorised officers are permitted to:

  • seize and retain any books, documents or records (including electronic data) relating to an activity found at premises under inspection and take any other steps that appear to the officer to be necessary for preserving, or preventing interference with such material;
  • require any person engaged in the carrying on of business at the premises under inspection to state his or her name, home address and occupation, and provide to the authorised officer any books, documents or records relating to that activity that are in that person’s power or control, and to give to the officer such information as he or she may reasonably require in regard to any entries in such books, documents or records, and where such books, documents or records are kept in a non-legible form to reproduce them in a legible form;
  • inspect and take copies of or extracts from any such books, documents or records, including in the case of information in a non-legible form, copies of or extracts from such information in a permanent legible form; and
  • require a person to provide any information the authorised officer may require about individuals carrying on business at the premises or any other information about the activities being carried on at the premises that the authorised officer may reasonably require.

Companies and individuals that are the subject of a dawn raid are required not to obstruct the CCPC (see question 38), and can be compelled to answer questions legitimately put to them by authorised officers. However, the CCPC cannot compel the disclosure of legally privileged material and cannot use in evidence any information obtained by way of a self-incriminating statement.

On 29 May 2017, the Supreme Court gave judgment in relation to an appeal by the CCPC of a successful High Court challenge brought by CRH plc and others in relation to the exercise by the CCPC of its search and seizure powers during a dawn raid at Irish Cement Limited in May 2015. The Supreme Court unanimously rejected the CCPC’s appeal. The court held that the CCPC’s proposed approach to reviewing documents seized during the dawn raid, including irrelevant and private material, would contribute to a breach of article 8 of the European Court of Human Rights (ECHR) if it were to proceed. The Supreme Court ordered that the CCPC be restrained from reviewing unrelated electronic documents other than in accordance with agreement between the parties and in accordance with article 8 of the ECHR. The case was the first challenge to the exercise by the CCPC of its powers under section 37 of the 2014 Act, and the outcome provides welcome guidance on the scope of those powers.

Settlement mechanisms

Is there any mechanism to settle, or to make commitments to regulators, during an investigation?

Unlike many other competition authorities across the EU, the CCPC does not have the power to impose sanctions (such as fines) for infringements of competition law. Sanctions can only be imposed by the Irish courts following successful criminal prosecution; civil fines are not currently available in Ireland.

For that reason, the CCPC has, in many cases, sought undertakings or commitments from parties that address competition concerns arising from an investigation. From the CCPC’s perspective, the acceptance of commitments has the benefit of addressing market behaviour without having to go to court, in particular where the conduct under investigation does not involve alleged cartel behaviour and is therefore not likely to be subject to criminal prosecution. From a company’s perspective, agreeing commitments is a way of bringing a swift and clear conclusion to the CCPC’s investigation (which is otherwise not time-limited).

The current position in relation to the imposition of fines directly by the CCPC may change as a result of the transposition of the ECN+ Directive into Irish law. However, at this stage, the manner in which the ECN+ Directive will be transposed has not been determined, including in relation to fining powers.

What weight will the authorities place on companies implementing or amending a compliance programme in settlement negotiations?

As noted in the response to question 4, the existence of a competition compliance programme may be a mitigating factor in relation to sanctions were a criminal prosecution to be successfully brought. In addition, it may be taken into account by the CCPC in the context of agreeing commitments to address particular competition concerns raised by the CCPC. As we previously noted, the closure of the CCPC’s recent investigations into the Irish Property Owners Association and Nursing Homes Ireland was in part due to commitments by the relevant associations to put in place a competition compliance programme.

Corporate monitorships

Are corporate monitorships used in your jurisdiction?

Owing to the structure of the enforcement regime in Ireland, corporate monitorships are not a feature of the system. Commitments given by companies to address competition concerns raised by the CCPC can be made an order of court; companies are therefore under a duty to comply with the terms of the commitments or face the risk of further sanction from the High Court. In practice, the monitoring of commitments offered by parties is handled directly by the CCPC, which has the power to pursue enforcement through the High Court for non-compliance.

Statements of facts

Are agreed statements of facts in a settlement with the authorities automatically admissible as evidence in actions for private damages, including class-actions or representative claims?

The rules on disclosure in competition law cases in Ireland are founded on the traditional rules of discovery, a process whereby a litigant in civil proceedings may obtain prior to the trial disclosure of documents in the possession, custody or power of another party, or occasionally from a non-party, which are both relevant to the matters in dispute and necessary to dispose fairly of the case or to save costs. While there is no definition of ‘document’ set out in court rules, the term ‘document’ is broadly defined in case law as meaning anything that contains information.

There are no specific rules regarding the admissibility of an agreed statement of facts, but it is not the case that any such statement would automatically be admissible as evidence in actions for private damages.

While there are no class action mechanisms available to potential litigants in Ireland, the Irish courts have recently seen a significant surge in private enforcement litigation, most notably following the European Commission’s decision in the Trucks cartel.

The European Commission’s Damages Directive was recently transposed into Irish law by means of statutory instrument and provides for greater clarity on the admissibility of leniency and settlement materials in the context of follow-on damages actions. However, the regulations apply only in respect of infringements that occurred after 27 December 2016 and, for that reason, are unlikely to apply directly to any cases for at least several years to come.

Invoking legal privilege

Can the company or an individual invoke legal privilege or privilege against self-incrimination in an investigation?

Legal privilege may be asserted over certain types of documents, including confidential communications passing between a lawyer and client created for the purpose of providing legal advice and documents produced in contemplation of or during legal proceedings for the sole or dominant purpose of those proceedings. The 2014 Act sets out the general principle that no person or company can be compelled to disclose privileged legal material, and the CCPC is not generally authorised to take privileged legal material. Under Irish law, communications between in-house counsel as well as external legal advisers and their clients are legally privileged.

Section 33 of the 2014 Act sets out a specific procedure for dealing with legally privileged material that may come into the possession of the CCPC during a dawn raid. This section provides that the disclosure of information generally may be compelled, or possession of it taken under the provisions of the 2014 Act, notwithstanding that the information contains privileged legal material, provided that the compelling of its disclosure or the taking of its possession is done by means whereby the confidentiality of the information can be maintained (as against the person compelling such disclosure or taking such possession) pending the determination by the High Court of the issue as to whether the information is legally privileged. As such, the 2014 Act stipulates that there be a process by which legally privileged material is identified and kept confidential with disputes settled by the High Court if necessary.

As noted in question 31, companies and individuals can be compelled to answer questions legitimately put to them by authorised officers of the CCPC. However, self-incriminating statements cannot be used by the CCPC in evidence in relation to any prosecution of an offence under the 2002 Act. It is clear from case law that the privilege against self-incrimination is protected by the Irish Constitution for individuals (ie, natural persons) in certain circumstances. Whether a corporate entity can also assert the privilege under Irish law is currently unclear. Certain legislative amendments suggest that the Irish parliament has taken the view that companies cannot avail of the privilege. The courts have not to date dealt directly with this question, but some statements by the courts suggest that they are unlikely to take an expansive view of the rights of companies in this context.

Confidentiality protection

What confidentiality protection is afforded to the company and/or individual involved in competition investigations?

Section 25 of the 2014 Act prohibits the unauthorised disclosure by any person of confidential information obtained by him or her in their capacity as, or while performing duties as, a member of the CCPC, a member of the CCPC staff, an authorised officer or otherwise engaged by the CCPC in any other capacity. However, there are a wide range of exceptions to this general rule, notably permitting disclosure where it is authorised by the CCPC or by a member of the staff of the CCPC duly authorised to permit the disclosure; it is required by law; the disclosure is a communication made by such persons ‘in the performance of any of his or her functions under [the 2014 Act], being a communication the making of which was necessary for the performance by [such person] of any such function’; or the disclosure constitutes information, provided to any person or body listed in section 24(1), which in the opinion of the CCPC member, staff member or authorised officer, may relate to the commission of an offence whether under the 2014 Act or not.

Information obtained by the CCPC during a dawn raid may be subject to further onward disclosure in two circumstances in particular.

First, section 24 lists 16 other agencies within the Republic of Ireland, including the police, the Office of the Director of Corporate Enforcement, the Revenue Commissioners, and the Central Bank of Ireland, to whom confidential information in the possession of the CCPC may be disclosed. While the 2014 Act does not impose a positive duty on the CCPC members, staff or authorised officers to disclose such information, it authorises them to do so where they believe it may relate to the commission of an offence unrelated to competition law. Section 24(2) provides ‘notwithstanding any other law’ for reciprocal disclosure to the CCPC of confidential information held by the agencies listed in section 24 where they consider the information may relate to an offence under the Competition Acts.

Second, section 23 of the 2014 Act provides the CCPC may, with the consent of the Minister for Jobs, Enterprise and Innovation, enter into arrangements with a ‘foreign competition or consumer body’ whereby the CCPC may furnish to the other agency ‘information in its possession’ if the information is ‘required by that agency for the purpose of performance by it of any of its functions’. The CCPC is a member of the European Competition Network and cooperates closely with other competition agencies across the EU. Article 12 of EC Regulation 1/2003 provides that, for the purposes of applying articles 101 and 102 TFEU, the European Commission and national competition authorities (including the CCPC) shall have the power to provide one another with and use in evidence ‘any matter of fact or of law, including confidential information’. However, with regard to the use in evidence of that information, this power is expressly limited to being ‘for the purpose of applying articles 101 or 102 TFEU and in respect of the subject matter for which it was collected by the transmitting authority’.

Refusal to cooperate

What are the penalties for refusing to cooperate with the authorities in an investigation?

Failure or refusal to cooperate with a CCPC investigation is a serious matter and can result in criminal sanctions being imposed. Section 35 of the 2014 Act makes it a criminal offence for any person to: obstruct or impede an authorised officer (of the CCPC) in the exercise of his or her powers under the 2014 Act in relation to an investigation; without reasonable excuse, fail to comply with a request or requirement of an authorised officer under the 2014 Act; or give information that is false or misleading in any material respect in purported compliance with a request or requirement from an authorised officer. A person found guilty of an offence under this section is liable to potential fines and, on indictment, to imprisonment for a term not exceeding three years.

Infringement notification

Is there a duty to notify the regulator of competition infringements?

As noted in the response to question 15, the CIP allows for a mechanism by which a participant in a cartel can blow the whistle on a cartel in order to avail of potential immunity from prosecution.

While there is no general duty under Irish law to report or notify the CCPC of a competition infringement, it should be noted that the offence under section 6 of the 2002 Act of engaging in an agreement to fix prices, limit output or share markets (ie, a serious cartel offence) is designated a relevant offence under the Criminal Justice Act 2011. This means that it is a criminal offence for any person to fail to disclose to An Garda Síochána, as soon as practicable, information that he or she knows or believes might be of material assistance to An Garda Síochána in relation to the prevention of the commission or investigation of a serious cartel offence by another party or parties. This offence is punishable by fines of up to €5 million or imprisonment, or both.

Limitation period

What are the limitation periods for competition infringements?

There is no limitation on the CCPC’s ability to initiate an investigation into alleged anticompetitive conduct and there is no statutory time frame in which the CCPC must complete an investigation. In respect of private enforcement actions, in general a six-year limitation period starts to run from the date of accrual of the cause of action. The regulations implementing the EU Damages Directive in Ireland have introduced new rules on limitation periods, including when these begin to run and when they can be suspended. However, as noted above, the regulations apply only in respect of infringements that occurred after 27 December 2016.