The DPP has brought charges against various individuals and Citroen dealerships for their alleged involvement in a price-fixing cartel. In the most recent case*, Mr Justice McKechnie warned that the serving of a custodial sentence for price-fixing offences in breach of the Competition Acts "was close at hand".
The Central Criminal Court has imposed a sentence on Mr Patrick Duffy, director of Duffy Motors (Newbridge) Limited, of six months in respect of "entering into" a price fixing cartel agreement for car prices and nine months in respect of "implementing" such an agreement, both sentences were suspended in their entirety for a period of five years. A fine of €100,000 was also imposed.
Mr Duffy, as director of the company, was charged with, and pleaded guilty to, two counts of authorising the company to enter into, and to implement, an agreement which had as its object the prevention, restriction or distortion of competition in the trade of motor vehicles by directly or indirectly fixing the selling price Citroen motor vehicles between 24 June 1997 and the 18 June 2002, contrary to section 4(1) of the Competition Act 1991, and ss. 2 and 3(4)(a) of the Competition (Amendment) Act 1996. Mr Duffy also pleaded guilty to two similar counts, on behalf of the company.
Price fixing constitutes anti-competitive behaviour under section 4(1) of the Competition Act 1991. Pursuant to the Competition Act 1996, such behaviour constitutes a criminal offence and following conviction on indictment, carries a maximum custodial sentence of two years and/or a fine of approximately £3 million or 10% of the individual/undertaking's annual turnover, in the last financial year ending in the twelve months preceding conviction, whichever sum is greater. Under section 8 of the Competition Act 2002, the period of imprisonment was increased to five years, and the specified fine is now €4 million or 10% of the individual/undertaking's annual turnover for the relevant year, whichever of the two amounts is greater.
The DPP and the Competition Authority obtained the first conviction under the Competition Act 2002 in the case of DPP v Denis Manning (Unreported, High Court, 9 February 2007). Denis Manning, the secretary of the Irish Ford Dealers' Association was convicted of aiding and abetting price fixing by that Association and was given a twelve month prison sentence, suspended for five years, and fined €30,000.
To date there have been four cases in which a custodial sentence has been imposed for breaches of the Competition Act, yet no convicted person has yet spent any time serving their sentence. Mr. McKechnie in the Duffy case noted that: "fines, unless severe and severely impacting, are not a sufficient deterrent". He stated that if he had been dealing with the two other prosecutions, taken against Mr Durrigan and Mr Doran, arising out of the Citroen dealership cartel, the results for those individuals and their companies "would not necessarily have been as they were". Mr Durrigan and Mr Doran were sentenced, respectively, to three months, suspended for two years, and a fine €12,000, and three months, suspended for five years, and a fine of €20,000. Accordingly, it appears that the courts are prepared to get tougher in future with individuals convicted under the Competition Acts and it is only a matter of time before a person actually serves time for a breach of the Competition Acts.