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CCPC Publishes Inaugural Annual Report
The Competition and Consumer Protection Commission (“CCPC”) published its first Annual Report for the period 31 October to 31 December 2015 (the “Report”). The CCPC presents itself as a determined and pragmatic regulator with a mission to root out ‘everyday’ causes of consumer detriment. The Report suggests that the merger of the competition and consumer agencies in late 2014 and a recent recruitment drive have energised the CCPC.
In addition, since publication of the Report, details have been released of new CCPC investigations. Accordingly, companies doing business in Ireland should be ready for CCPC enforcement activity.
1 Competition Law Investigations
The Report explains some of the CCPC’s work in the area of cartels, such as its dawn raid in the bagged-cement industry. This raid ultimately led to High Court action being taken against the CCPC by the raided entity, Irish Cement Limited and its parent, CRH, with a finding against the CCPC. Matheson reported on this case earlier this year; for more information click here.
The Report also highlights an investigation carried out by the CCPC into alleged anti-competitive activity in the industrial flooring sector. As a result of the investigation, the Director of Public Prosecutions (“DPP”) charged an individual and an undertaking with entering into a bid-rigging agreement in breach of competition law. It appears from the Report that this was the only prosecution taken by the DPP on foot of a CCPC investigation within the period of the Report.
Furthermore, the CCPC opened a cartel investigation into allegations of a criminal breach of competition law in the aviation sector. As part of this investigation, which is ongoing, authorised officers of the CCPC conducted a search in the sector. The CCPC also reports that it closed two cartel investigations in the procurement and retail sectors respectively.
The number of mergers notified to the CCPC has doubled since late 2014, when new thresholds for mandatory notification were introduced. Non-media mergers or acquisitions now require prior notification where the aggregate turnover in the State of the undertakings involved is not less than €50 million; and the turnover in the State of each of two or more of the undertakings involved is not less than €3 million. The previous regime required each of two of the undertakings involved to have worldwide turnover of €40 million with both undertakings carrying on business in the State and one undertaking having turnover of €40 million in the State.
While some of the increase in notified mergers may reflect a general increase in merger activity, it seems clear that the alteration in the thresholds has led to a burdensome obligation to notify transactions which have little or no effect on competition in Ireland. It is to be hoped that the thresholds will be amended following a proper consultation with competition law stakeholders.
However, any change to the current thresholds would require primary legislation and therefore it seems that we are likely to have to live with the current thresholds for an extended period.
3 Consumer Law Investigations
The CCPC’s new consumer focus has been remarkable. The CCPC has taken a pro-active approach to vehicle offences. In 2015 it took enforcement action against a motor company for misleading commercial practices, issuing a Compliance Notice compelling the company to ensure that future advertising is fully accurate. The CCPC also secured its first conviction of an individual involved in vehicle sales under the General Product Safety Directive in relation to the sale of a dangerous product.
The CCPC has issued consumer law Compliance Notices to seven telecoms and online retail companies for failure to comply with different aspects of the Consumer Rights Directive, requiring the companies to correct the information on their websites and change their cancellation process. The companies included Vodafone, Meteor, Eir, UPC, and Expert Ireland.
It also took enforcement action against a number of Hoverboard sellers on foot of safety concerns, which resulted in an import ban and an export order, ordering their return to the country of origin and directing that the non-compliant Hoverboards not be placed on the Irish market.
The CCPC is also pursuing two investigations of Volkswagen, following the emissions scandal last year, and two investigations into alleged pyramid schemes.
Overall, the Report emphasises the aim of the CCPC to take a pro-active approach to competition breaches and consumer protection. The continued recruitment drive by the CCPC will no doubt facilitate increased results and enforcement actions across the board.
4 Recent Activity
In the time since the period covered by the Report, the CCPC’s activity has continued. During a Dáil debate this summer, the Minister of Jobs, Enterprise and Innovation stated that by July 2016, the CPPC had conducted 21 searches of companies suspected of anti-competitive practices.
On 13 September 2016, the CCPC announced that it had launched an investigation into suspected breaches of competition law in the motor insurance sector, issuing witness summonses and information requests to major motor insurance providers and industry groups representing insurers and brokers. According to the CCPC, the investigation, which is ongoing, “relates to industry participants openly signalling up-coming increases in motor insurance premiums in the State”. We await the outcome of this investigation.