The Competition (Amendment) Act 2012 ("the 2012 Act") came into effect on 3 July 2012. The measures contained in the 2012 Act aim to meet Irish commitments in the EU/IMF Financial Assistance Programme of 28 April 2011 and to aid the Competition Authority ("the Authority") in both the investigation and prosecution of anti-competitive practices. The provisions also aim to enhance private enforcement.
The proposed new legislation was highlighted in our autumn 2011 newsflash1, however the 2012 Act contains some additional, and in some cases innovative, provisions to strengthen both public and private competition law enforcement.
The new provisions have the potential to advance both the public and private enforcement regime. As the summary table shows, not only has the severity and range of sanctions available to Courts increased, the 2012 Act also includes some novel provisions in relation to settlement arrangements between the Authority and parties, follow-on actions, and the imposition of orders for costs.
Settlements
Authority investigations resulting in a settlement between the parties under investigation and the Authority are currently often published on the Authority's website at the end of the investigation. This settlement will have been reached in order to avoid litigation. New provisions in the 2012 Act will now allow the High Court, upon application by the Authority, to make commitments provided to the Authority to be made an order of Court. Certain criteria must be met, which include:
- Consent to the making of the order
- Legal advice having been obtained by the party in advance of consent
- The agreement is clear and unambiguous and is capable of being complied with
- The undertaking is aware that failure to comply with the order would result in contempt of court.
Before applying to the court, the Authority must publish the terms of the agreement and information regarding the application on its website and in at least two daily newspapers circulating throughout Ireland. The order may be varied or annulled on application by a person within 45 days from the making of the order if the order would force the person giving the undertaking to breach a contract with the applicant or would render a term incapable of performance. No order will be made by the High Court to vary or annul an order if the contract or term of the contract contravenes section 4 or 5 of the Competition Act 2002 or Article 101 or 102 of the TFEU. The Court order will last for seven years however the Authority can apply, within three months of expiration, for an extension for a further period of three years.
Follow on Action for Damages
The 2012 Act aims to simplify the taking of follow-on action for damages. Where a court (either civil or criminal) determines that an undertaking contravened section 4 or 5 of the 2002 Act, or Article 101 or 102 of the TFEU, that finding will be res judicata for the purposes of any subsequent proceedings whether or not the parties to the follow-on proceedings are the same as the parties to the original proceedings. Consequently, plaintiffs in follow on actions will no longer have to prove the competition law breach but will only have to prove loss, causation, and quantification of damages.
Costs of Investigations
The 2012 Act provides that persons convicted of a criminal offence will be ordered by the court to pay the costs associated with the investigation, detection and prosecution of the offence, unless the court is satisfied that there are special and substantial reasons for not doing so. This is a potentially significant enhancement to the regime.
Conclusion
The Competition (Amendment) Act 2012 serves to strengthen both public and private enforcement. The provisions relating to settlements and follow-on actions are noteworthy and it will be interesting to observe how the provisions are employed in practice, and, in particular, how quickly and energetically the Authority makes use of the settlement procedure.
Footnotes
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
