Will one of Margrethe Vestager’s last acts as the European Commissioner for Competition be to help lower motor insurance premiums for Irish motorists?

That’s a legitimate question following the European Commission’s opening of a formal investigation into alleged anti-competitive practices in Ireland’s motor insurance industry.

Commissioner Vestager’s move will be of significant interest to Irish consumers. The European Commission will now conduct a thorough investigation into the role of Insurance Ireland, a trade association whose members comprise of insurance companies and broker agents. In particular, Insurance Ireland’s offering includes a database which collates claims data from its member companies on an ongoing basis. The European Commission’s investigation will assess whether the conditions imposed on new entrants, wishing to participate in and access this database, may have had the effect of placing those companies at a competitive disadvantage on the Irish motor insurance market in comparison to member companies already having access to this database.

The move by the European Commission to open a formal investigation has not been taken lightly. It follows a preliminary inquiry which dates back to at least the summer of 2017 when a series of so-called “dawn raid” inspections are alleged to have taken place on Insurance Ireland and a number of Irish-based brokers. Those dawn raids are significant as it is extremely rare, in practice, for the European Commission to intervene in the Irish market and conduct dawn raids here. Indeed, its last foray to these shores in the context of an investigation into potential anti-competitive arrangements had been well over a decade prior to these recent events.

The European Commission’s investigation is now running parallel to a separate domestic Competition and Consumer Protection Commission investigation into other potential alleged breaches of competition law in the Irish motor insurance industry. The CCPC initiated an investigation in late 2016 in relation to the issue of price signalling (i.e., the making of public announcements relating to future prices and strategic plans). The CCPC is focussed on whether motor insurers and brokers engaged in anti-competitive practices by openly signalling upcoming price increases in motor insurance premiums. The allegation being that such actions may have helped to result in coordination between industry competitors in breach of Irish competition law.

The CCPC’s investigation is thought to be close to reaching a conclusion, though this will not impact on the European Commission’s separate investigation, no matter what the outcome.

It is worth noting that significant fines can be levied for breaches of both Irish and EU competition law, with offending undertakings exposed to fines of up to 10% of their annual global turnover. This could potentially be very substantial in the context of multinational insurance businesses.

Perhaps more pertinently for consumers, any adverse findings against the industry are likely to result in it being opened up to more competition. This would be the real benefit as increased competition should give rise to lower premiums for Irish motorists over time.

No timeline has been provided for the conclusion of the European Commission’s investigation. In all likelihood, a decision will be made after Commissioner Vestager’s departure from her current role. As matters stand, it seems unlikely she will be reappointed when a new European Commission is formed later this year on 1 November (but this will become clearer once the national elections in Commissioner Vestager’s home country of Denmark are held on 5 June). Her impact, however, from her oversight of the Apple State aid decision to her ongoing antitrust battles with Google and other tech titans, will ensure she has set the bar high for whoever replaces her in the role of Europe’s top competition regulator and watchdog.

And Commissioner Vestager’s last hurrah in opening this formal investigation may yet be a boon to the Irish motorist.