Enforcement

Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

The CCPC takes competition complaints by phone, fax, post and email. The complainant can make the complaint in confidence and with anonymity. The CCPC will consider the matter and, following a preliminary screening, may subsequently carry out a formal investigation, including the possibility of a dawn raid or of a witness summons being issued. The time frame for investigations varies according to the complexity of the issues concerned.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

Since the commencement of the Act, vertical restraints have been at the centre of a relatively small number of published cases. The majority of these cases involved alleged RPM.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

An agreement that breaches section 4(1) of the Act will be void and unenforceable in its entirety. In certain instances, however, it may be possible to disregard only the offending provisions. In this scenario, the remainder of the agreement would continue in full force and effect. This is the application of an Irish law principle called severance.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

The CCPC does not have the power to impose penalties; such powers lie solely with the Irish courts. The courts have the power to impose civil or criminal sanctions having regard to the severity of the offence.

The CCPC does have the power to issue non-binding enforcement decisions declaring that, in its opinion, a restraint contravenes section 4(1) of the Act. The CCPC also has the power, under the Competition (Amendment) Act 2012, to accept commitments from an undertaking not to engage in anticompetitive behaviour. The CCPC may apply to the High Court to make such commitments binding and thereafter, any breach of those commitments would amount to contempt of court.

The civil sanctions that may be imposed by the court include a declaration that the conduct in question amounts to a breach of the Act and an injunction to prevent the undertaking from continuing to engage in such conduct.

The criminal sanctions available to the court for breach of the Act will, generally, only be pursued in cases of ‘hardcore infringements’. An undertaking or individual found guilty of breaching section 4 of the Act will be liable:

  • on summary conviction of a fine of up to €5,000; and
  • on indictment of €5 million or 10 per cent of the turnover of the undertaking or individual for the financial year ending 12 months prior to the conviction (whichever is highest).

The court may impose fines of €300 per day on summary conviction and €50,000 per day on indictment for each day that the contravention continues.

The Act also provides for custodial sentences: imprisonment of up to 10 years for competition offences.

Criminal sanctions were imposed in the context of RPM in the Estuary Fuels case. However, the four more recent decisions outlined in question 19 show a move away from this approach. Modern Irish Competition Law’s authors note that the CCPC indicated in a 2011 paper that the ‘[Estuary] case would probably not reflect current Competition Authority enforcement policy’.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

The CCPC has statutory powers to carry out investigations of alleged breaches of competition law. The CCPC’s investigative powers are formidable. In particular, the CCPC can enter business premises and private dwellings to search and seize evidence discovered; and summon witnesses to answer questions under oath or provide documentary evidence to the CCPC on pain of criminal sanction.

Before the CCPC exercises its powers of search and seizure (dawn raids) to search premises, it must obtain a warrant from the District Court. The judge will need to be satisfied that there is no other reasonable way of obtaining the information in question; that there is evidence or a reasonable suspicion that a criminal offence has been committed; and that the constitutional rights of the individuals involved will be protected.

The Competition and Consumer Protection Act 2014 provides an even wider scope for these powers. The CCPC may enter and search ‘any place occupied by a director, manager, or member of staff’ where there are ‘reasonable grounds’ to believe that records relating to the business are being kept there.

It is a criminal offence to fail to attend before the CCPC in response to a witness summons or to obstruct the CCPC from exercising its search and seizure powers. These offences are punishable on summary conviction, with a fine of up to €3,000 or imprisonment for up to six months, or both.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Section 14(1) of the Act provides a right to any person who is aggrieved in consequence of any agreement, decision, concerted practice or abuse that is prohibited under section 4 or 5 to seek relief against either or both the undertaking or ‘any director, manager or other officer of such an undertaking’. An action may be brought in the Irish Circuit Court or the High Court. Under section 14(5), the court may grant the applicant ‘(a) relief by way of injunction or declaration; (b) damages, including exemplary damages’.

In addition, the EU’s ‘Damages Directive’ was implemented in Ireland in 2017 by way of Statutory Instrument No. 43/2017, the European Union (Actions for Damages for Infringements of Competition Law) Regulations 2017, and should further assist parties seeking private enforcement.

The successful party will normally be able to recover legal costs in accordance with court rules.