Enforcement proceedings in dominance in Ireland

Enforcement proceedings

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

Both section 5 of the Act and article 102 of the Treaty can be enforced by private parties in the Irish courts.

Under the provisions of the Act, any person who is aggrieved in consequence of any abuse that is prohibited under section 5 of the Act or article 102 of the Treaty has a right of action for relief against any undertaking or any director, manager or other officer of an undertaking that commits an abuse. The relief that can be granted to the plaintiff could be in the form of an injunction, a declaration or damages. Under the European Union (Actions for Damages for Infringements of Competition Law) Regulations 2017, exemplary damages are no longer available for a breach of the Act.

Under the provisions of the Act, the CCPC has the right to seek an injunction or declaration (but not damages) in respect of a breach of section 5 of the Act or article 102 of the Treaty and the CCPC can apply for a court order making legally binding any settlement terms given to it by a private party following an investigation.

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

The CCPC has not been conferred with the power to impose sanctions. The courts can grant injunctions or declarations and award damages to private litigants in civil cases.

In addition, both the CCPC and the DPP can initiate criminal prosecutions. However, only the DPP can prosecute serious infringements (prosecutions on indictment for jury trial) of the Act. The maximum penalty that can be imposed for a breach of section 5 of the Act or article 102 of the Treaty is a fine of €5 million or 10 per cent of turnover, whichever is the greater. There is no provision within the Act for imprisonment in cases involving the abuse of a dominant position.

As explained in question 1, structural remedies are also provided for. Under section 14(7) of the Act, where a court has decided that an undertaking has abused a dominant position contrary to section 5 or article 102, it may order either that the dominant position be discontinued unless conditions specified in the order are complied with, or that the dominant position be adjusted (by a sale of assets or as otherwise specified) within a period specified by the court.

To date, the Irish courts have not imposed any penalty or structural remedy for abuse of dominance and there have been no significant cases where damages were awarded.

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

As noted above in question 27, the CCPC has not been conferred with the power to impose sanctions owing to provisions of the Irish constitution. Only the courts can impose sanctions for breaches of sections 4 and 5 of the Act. There is a bill currently before the Dáil (Irish Parliament), the Competition and Consumer Protection (Amendment) Bill 2018, which seeks to grant the CCPC the power to impose administrative sanctions, including the power to impose financial sanctions for breaches of article 102 TFEU, although it is not yet clear when it may be adopted into law. It is proposed that these new administrative powers would be subject to review by the High Court.

What is the recent enforcement record in your jurisdiction?

Complaints regarding alleged abuse of dominance are regularly made to the CCPC. The CCPC’s most recent annual report (for the period 1 January 2017 to 31 December 2017) states that the CCPC opened 26 new screening files and closed 29 screening files relating to potential civil breaches of competition law. Seven of the files reviewed by the CCPC related to an alleged abuse of dominance. The CCPC has not published any details of the files reviewed.

The public enforcement powers provided for in the Act have rarely been used in respect of abuse of dominance.

Thus far, there has been only one civil prosecution in respect of an alleged breach of section 5 (the ILCU case discussed at question 9) and this case was unsuccessful on appeal to the Supreme Court.

Thus far, there has been no criminal prosecution in respect of an alleged breach of section 5.

In recent years, section 5 investigations have most frequently resulted in negotiated settlements and the CCPC and ComReg published details of these investigations on its website in the form of ‘Enforcement Decisions’ or press releases.

In March 2015, the CCPC published a press release on a settlement concluding its investigation into an alleged abuse of dominance by the Glasnevin Trust, the largest provider of funeral and burial services in Ireland. The settlement terms included requirements to facilitate price transparency and to prevent price discrimination against customers who are also competitors.

In August 2014, the Competition Authority published a press release on a settlement concluding its investigation into an allegedly unlawful refusal to supply by a school uniform manufacturer. The settlement terms included a commitment to supply the complainant whom the manufacturer had originally refused to supply.

In October 2014, the Competition Authority published an ‘Enforcement Decision’ on its investigation of the compliance of certain discounts offered by the universal postal service provider, An Post, with the section 5 prohibition on unlawful ‘loyalty rebates’. The decision identified competition concerns regarding the discounts but stated that its investigation was closed because An Post had amended its discount procedures in a manner that addressed the CCPC’s concerns.

The above case involving An Post was the second recent investigation into allegedly unlawful ‘loyalty rebates’. In January 2012, the Competition Authority published an ‘Enforcement Decision’ in respect of its investigation into certain discounts offered by the national public service broadcaster, RTÉ. The decision identified competition concerns regarding the discounts and stated that its investigation was closed because RTÉ made a binding commitment to cease offering ‘share deal’ discounts that were conditional on a share of the advertiser’s television advertising budget being committed to RTÉ.

In early 2006 the Competition Authority published details of an investigation of a computerised reservation system (operated by Galileo Ireland) used by most travel agents in Ireland that resulted in a non-discriminatory manner (press release, 11 January 2006).

The courts have been asked to consider in a number of cases whether or not an abuse of a dominant position has occurred. Of the cases considered to date, damages have been found to be payable in only one case involving abuse of dominance (Donovan and others v Electricity Supply Board), where it was held that the defendant had abused its dominant position by imposing unfair trading conditions. In A&N Pharmacy v United Drug, an injunction was granted that obliged the defendants to continue trading with the plaintiffs pending the full hearing of that case. Both cases were taken under the predecessor to the Act, which contained a provision similar to section 5.

In Nurendale Limited (T/A Panda Waste Services) v Dublin City Council & Others the High Court heard a challenge by Panda Waste, a domestic waste collector, to a decision taken by the four local authorities responsible for Dublin City and County to introduce a ‘variation’ to their joint waste management plan for 2005 to 2010, which would permit each local authority to reserve to itself responsibility for waste collection services in areas in which that local authority had previously competed with private operators (subject to the right of each local authority to put waste collection services in any given area out to tender on an exclusive basis). Panda Waste alleged, inter alia, that this ‘variation’ amounted to an abuse of a dominant position (held either individually or collectively) by the local authorities, as it amounted to an unfair trading condition influencing or seeking to strengthen their position in the market for the collection of waste in the greater Dublin area in which competition had previously existed. In his judgment delivered on 21 December 2009, Mr Justice Liam McKechnie overturned the variation on the basis, inter alia, that each local authority was dominant in its respective area and that the local authorities were collectively dominant in the greater Dublin area in the market for the collection of household waste and that the ‘variation’ amounted to an abuse of a dominant position (held either individually or collectively) by the local authorities as it was an agreement in breach of section 4 of the Act (which prohibits anticompetitive agreements between undertakings), it would substantially influence the structure of the market to the detriment of competition and it would significantly strengthen the position of the local authorities on the market.

More recently, in Shannon LNG Ltd and Anor v Commission for Energy Regulation and others (mentioned at question 22), the High Court heard a judicial review challenge by Shannon LNG, an importer of liquefied natural gas (LNG), to a decision taken by the Commission for Energy Regulation (CER) relating to new methodologies for the calculation of tariffs relating to the use of and access to the transmission system and pipeline network for transport and delivery of natural gas in the Irish state-owned and operated by BGE. Among other claims, Shannon LNG claimed that the decision taken by the CER would enable or compel BGE to abuse the dominant position it occupied in the market in the Irish state for the transmission of natural gas contrary to article 102 of the Treaty as the contested decision would have the effect of applying charges for access to the onshore transmission system based on both the costs of operating and maintaining that system and the costs of the interconnectors, which the Shannon LNG would not be using. Shannon LNG also claimed a margin squeeze because the tariffs would have the effect of reducing the costs of using the interconnectors while increasing access costs at the other entry points to the transmission system, thereby making it economically more attractive for importers to use the interconnectors. Mr Justice John Cooke rejected Shannon LNG’s claims under article 102 of the Treaty as premature, as the actual tariffs had not yet been set and no entry or exit charges had been calculated. Mr Justice Cooke stated that some level of cross-subsidisation within the transmission system was likely inevitable. The judge also found that the margin squeeze claim was unfounded as it was not possible to identify separate defined markets for the provision of services for transport of gas to Ireland, and a market for transmission services onshore within the state.

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

There is no express provision in the Act to deal with this situation. Under the general relief provisions in section 14(5) of the Act, however, a contract could be declared void and unenforceable by a court.

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

Section 14(1) of the Act provides that any person who is aggrieved in consequence of any abuse that is prohibited under section 5 of the Act or article 102 of the Treaty shall have a right of action for relief against any undertaking or any director, manager or other officer of an undertaking that commits an abuse. It is possible to seek a mandatory injunction under which a dominant undertaking may be obliged to grant access to infrastructure or technology or to trade with the plaintiff seeking the relief. In ILCU, discussed in questions 9 and 29, ILCU was ordered by the High Court to share access to its savings protection scheme with credit unions not affiliated to ILCU on the basis that access to the scheme was unlawfully tied to membership of ILCU. This order was subsequently overturned by the Supreme Court. Also, in A&N Pharmacy v United Drug Wholesale, discussed in questions 7 and 19, the High Court granted an interlocutory injunction that obliged the defendant to supply the plaintiff with pharmaceutical products on terms of cash on delivery.

Further, the European Union (Actions for Damages for Infringements of Competition Law) Regulations 2017 (the Damages Regulations), transposed Directive No. 2014/104 EU (the Damages Directive) into Irish law on 17 February 2017, which governs follow-on actions for damages.

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

Section 14(1) of the Act provides that an aggrieved person may bring an action in the courts seeking damages. To date, there have been no significant cases where damages were awarded.

Prior to the transposition of the Damages Directive into Irish law, in late 2008/early 2009, two private damages actions arising from the European Commission decision in Irish Sugar (Gem Pack Foods v Irish Sugar plc and ASI v Greencore plc) were settled part-way through their respective hearings before the High Court. As both cases were settled prior to judgment, the Irish courts have yet to have an opportunity to establish their approach to quantifying damages in such cases.

Regulation 8 of the Damages Regulations now provides that an infringement of competition law found by a final decision of a national competition authority or by a review court is deemed irrefutably established for the purposes of an action for damages. Further the final decision taken in another EU member state may be presented as prima facie evidence that an infringement of competition law occurred.

Regulation 4 of the Damages Regulations provides that where a person has suffered harm caused by an infringement of competition law, the person shall be able to claim and obtain in any actions for damages under section 14 of the Competition Act 2002, full compensation for that harm. The Damages Regulations amends section 14 of the Competition Act 2002 to remove the provision for exemplary damages. Further, Regulation 15 states that where quantification of harm is practically impossible or excessively difficult to quantify, an Irish court may estimate such harm. The CCPC may, upon request by an Irish court, assist the court with this determination.

To what court may authority decisions finding an abuse be appealed?

Where the CCPC takes a view that conduct breaches section 5 of the Act or article 102 of the Treaty, it may initiate civil or criminal proceedings before the Irish courts. Civil proceedings are more likely to be initiated for alleged breaches of section 5 or article 102 (eg, the ILCU case referred to above in questions 9 and 29). In that case, civil proceedings were initiated in the High Court, whose judgment was appealed to (and overturned by) the Supreme Court. As stated in question 29, section 5 or article 102 investigations most frequently result in negotiated settlements between the CCPC and the relevant undertaking.