As the Irish economy re-opens following the Covid-19 lockdown, a coalition government consisting of Fianna Fáil, Fine Gael and the Green Party published Tuesday, 16 June 2020 a wide-ranging Programme for Government, which included a number of new and renewed proposals relevant to Irish competition and regulatory law and enforcement.
Whilst the Programme remains provisional and is due to be put to a vote of members of the respective parties later this week, it will – if adopted – raise significantly the profile of competition and regulatory enforcement in Ireland across a number of sectors (including advertising, financial services and telecommunications).
This article outlines these proposals and provides some context and comment for businesses active in the relevant sectors.
The Programme – which follows extended negotiations between the three parties since the Irish General Election of 8 February 2020 – repeatedly highlights the need to increase transparency in the Irish economy, tackle anti-competitive behaviour and foster competition in all sectors.
It includes specific proposals for the advertising, insurance, mortgage and telecommunications markets, including an expansion of enforcement powers for the Irish agencies responsible for competition and communications and the creation of a new office in Government to drive reform of the insurance industry.
These proposals build on work previously carried out by these agencies and also seek to take account of the significant impact of the Covid-19 pandemic on both consumers and businesses in Ireland.
Some of the key proposals in the Programme from a competition / regulatory perspective include:
1) New competition enforcement powers for the Irish competition regulator (the Competition and Consumer Protection Commission, or ‘CCPC')
- The Programme affirms the current government's standing commitment to give the CCPC additional enforcement powers to sanction and deter anti-competitive conduct in light of its obligations under EU law.
- These proposals follow the decision by the Council of the European Union to adopt the ECN+ Directive on 4 December 2018. The ECN+ Directive is designed to empower national competition authorities to be more effective enforcers and requires each EU member state, including Ireland, to give those national authorities (ie the CCPC) adequate civil enforcement powers.
- The deadline for Ireland to transpose the Directive is 31 January 2021 and we expect further announcements and consultations as to the Government's precise approach in this regard in the coming months. Any decision to confer the power to impose administrative sanctions outside a formal Court process is likely to come under close scrutiny in Ireland, including potential constitutional challenges.
2) New competition enforcement powers for the Irish communications regulator (the Commission for Communications Regulation, or ‘ComReg')
- The Programme also acknowledges the need to provide ComReg with greater powers of enforcement, with a particular focus on improving competition, innovation and customer service within the telecommunications sector and to protect against the possibility of market dominance or abuse.
- Under the proposals, ComReg will be able to issue greater administrative penalties to sanction rogue operators, to bring Ireland into line with other EU Member States.
- The widening remit of ComReg comes on the back of an assurance by Government to accelerate the roll-out of the National Broadband Plan, while establishing designated groups to facilitate local roll-out of the broadband infrastructure, as well supporting the development of broadband connections across the country.
3) A new unit in Government tasked with enhancing competition in the Insurance sector
- Acknowledging the substantial cost of insurance, particularly for small and medium-sized businesses, including in the wake of the Covid-19 pandemic, the Programme commits to the creation of an office tasked with encouraging greater competition in the sector.
- The Programme sets out its objectives for this office as including the removal of dual pricing in the industry and the need to work closely with the Central Bank of Ireland to compensate businesses in the post Covid-19 lockdown period.
- The precise make-up of this office, including its size, mandate and the extent (if any) of its enforcement powers, is not yet known.
- The proposal follows an investigation by the CCPC into the private motor insurance market and the commencement of a market study into the public liability insurance sector, both of which remain ongoing.
4) Proposals for mortgage reform
- The Programme notes the importance of mortgage reform in the immediate aftermath of Covid-19, and the expected increase in the non-performing loans servicing sector.
- It proposes to examine the introduction of a code of conduct on mortgage switching to make the process of switching mortgages easier and to underpin competition in the market. It also proposes to assess the code of conduct on mortgage arrears, including the available suite of alternative repayment arrangements, and ensure that it has legal effect.
- These proposals follow a previous study into the mortgage market by the CCPC, which made a number of recommendations for reform of the sector, including a call for the creation of a joint working group between the CBI and the CCPC to examine the appropriateness of certain mortgage offers, develop a set of policy recommendations for implementation, improve switching, encourage new entrants and promote longer term funding options.
5) An expanded role for the CCPC in policing the Irish advertising sector
- The Programme signals a desire to move away from the current self-regulating regime for advertising on social media.
- It proposes that the CCPC adopt a more active enforcement role and directing it to focus on ensuring full disclosure in relation to partnerships, sponsorships and other advertising relationships between media influencers and brands.
- It also directs the CCPC to make clear the obligations on social media influencers and the consequences for non-compliance are clearly set-out and enforced.
- These proposals follow recently published the Advertising Standards Authority for Ireland (the ‘ASAI') has recently published for Irish bloggers and social-media influencers in relation to the transparency of online marketing communications. This is an area that has come into sharp focus in recent years, with the CCPC's increased regulatory power a welcomed addition.
Many of the above proposals have been put forward in outline only and will require further refinement prior to implementation.This will likely involve dialogue with stakeholders and industry participants in the coming months.
Should you have any queries about the impact of these proposals on your business or wish to discuss how you can engage with Government on these issues, please do not hesitate to contact your usual Matheson contact or any member of Matheson's EU, Competition and Regulatory Group.
Originally published 18 June, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.