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Fine on Company Director in Ireland for Anti-Competitive Conduct Increased Six-Fold by Appeals Court
Following on from our article earlier this month regarding potential changes to Ireland’s approach to sanctioning anti-competitive conduct, the Irish Court of Appeal yesterday substantially increased a fine imposed on an individual convicted of anti-competitive conduct in May 2017.
Mr Smith had originally been fined €7,500 following a guilty plea for bid-rigging in the supply of flooring to multinational companies including Google, Mastercard and Paypal. He had also received a suspended three month jail sentence and a five-year disqualification as a Director. His company, Aston Carpets, was fined €10,000. This followed a lengthy investigation by the Competition and Consumer Protection Commission (“CCPC”) culminating in the arrest and detention for questioning of Mr Smith by the Irish Police, An Garda Síochána, in April 2014.
Following an appeal by the Director of Public Prosecutions (“DPP”) earlier this year, Appeals Court Justice Alan Mahon decided on 20 June 2018 that the fine levied by the High Court on Mr. Smith had been unduly lenient and increased it to €45,000. He did not alter the fine on the company or the suspended jail sentence.
Whilst neither the DPP nor the CCPC publishes guidelines on the calculation of the appropriate fine for anti-competitive conduct, a significant factor that may have weighed in the Judge’s mind in this case was the disparity between the original fine and the gains of the criminal behaviour (estimated by the CCPC to have been around €31,000). The total value of the contracts affected by the unlawful conduct was approximately €1.36 million.
This case originally arose as a result of a complaint and immunity application by another member of the bid-rigging cartel. A Cartel Immunity Programme is operated by the CCPC in conjunction with the DPP and provides immunity to a member of a cartel if they are the first member to come forward, reveal their involvement in illegal cartel activity and fully co-operate with the CCPC’s investigation.
Whilst the fine itself is low by international standards, this case is a reminder of the very serious consequences that competition law breaches can have on company directors individually (both financial and reputational) based in Ireland compared to other jurisdictions where sanctions are often limited to the company itself. It is also demonstrative of the CCPC’s willingness to take action in smaller markets, such as flooring, alongside investigations into larger sectors such as motor vehicle insurance and ticketing.
This article was co-authored by Ronan Scanlan, Associate in the EU Competition and Regulatory Group and Áine Mariga, Solicitor in the EU Competition and Regulatory Group.