Cartels were first criminalised in Ireland in 1996 and since then, their detection has been and remains the top enforcement priority of the Irish Competition Authority. Indeed, the Office of the Director for Public Prosecutions or DPP with support of the Authority has achieved secured various convictions for cartel activity albeit there have also been some acquittals. Much of the success is due to applications under the Cartel Immunity Programme (“CIP”). Moreover, recent legislative reform has increased the penalties for convicted cartelists.
Recent reform
The Competition (Amendment) Act 2012, which recently became law, has given renewed impetus to deterrence and enforcement regarding competition offences in Ireland. An undertaking found guilty of what is considered a “hard core” offence (e.g. price-fixing or market-sharing) is now liable on summary conviction to a fine of up to €5,000 (up from €3,000), or on conviction on indictment to a fine of up to €5 million (up from €4 million) or 10% of its worldwide turnover, whichever is the greater. Where a director, manager or similar officer of the undertaking is found to have authorised or consented to the offence, he/she may be personally liable to the same fines as the undertaking and to a term of imprisonment of up to six months on summary conviction or ten years on conviction on indictment (increased from five years). Cartel offences will, in most cases, be prosecuted on indictment, given their gravity. The new legislation further facilitates enforcement by providing that a person convicted of a competition offence may be liable for costs and expenses incurred regarding the investigation, detection and prosecution of a competition offence.
Home heating oil cartel
In 2004, following an application under the CIP, the DPP launched criminal proceedings for price-fixing against 24 individuals and companies involved in the distribution of home heating oil in the west of Ireland. The DPP secured 18 convictions in total, the majority of the defendants having entered guilty pleas, with fines of up to €12,500 imposed on participants. The cartel organiser, who pleaded guilty to aiding and abetting price-fixing, was fined €15,000 and received a six months prison sentence, suspended for twelve months.
The final conviction in the case occurred on 3 May 2012 when a jury unanimously found Pat Hegarty, a former oil company manager, guilty of having participated in the cartel. Mr Hegarty had previously challenged the case against him on the basis that the company which employed him had not been convicted of any offence. However, in October 2011 the Irish Supreme Court ruled that officers of companies may be tried for competition offences, even where the company itself has not been formally convicted. It is sufficient in such circumstances that the jury makes a finding of fact that the company has committed a competition offence. Mr Hegarty was fined €30,000 and given a suspended two-year prison sentence.
Citroën motor dealers cartel
The Citroën motor dealers cartel lasted for nearly nine years, during which time participants met regularly to set prices for Citroën cars and spare parts. Four companies and five individuals pleaded guilty to price-fixing and one individual pleaded guilty to aiding and abetting the offence. Suspended prison sentences ranging from six to nine months were handed down by the Irish courts, in addition to fines ranging from €2,000 to €80,000.
Waste collection companies
In July 2009, a jury of the Central Criminal Court acquitted three waste companies and certain directors of participating in a domestic waste collection cartel in Co. Mayo. The jury also cleared Padraig Hughes, a retired local authority official, of aiding and abetting this alleged cartel.
The proceedings arose from the 2005 decision of Mayo County Council to tender for domestic waste collection. The Court heard that the defendants realised that any individual local waste collector was unlikely to have the resources to submit a realistic bid for the entire business. At the suggestion of Mr. Hughes, representatives of four local waste collection companies discussed the possibility of submitting a joint tender. Subsequently, one of the four waste collectors made a complaint to the Authority regarding these discussions. Ultimately, the Authority’s investigation led to charges being brought by the DPP against three waste collection companies for sharing customers in the Mayo domestic waste collection market. The defence strongly argued that the privatisation of domestic waste collection in Co. Mayo had been a success, with consumers benefitting from lower prices and better service. In addition, householders, the defence argued, may decide which operator they want to collect their waste. The jury seems to have been swayed by the defence’s arguments since it returned a swift unanimous ‘not guilty’ verdict for each of the defendants in respect of all charges.
The Irish Cartel Immunity Programme
Immunity from prosecution for criminal competition law offences may be granted in certain circumstances where an application is made to the Authority under the CIP. While applications are made to the Authority, only the DPP can grant immunity from prosecution. A prospective applicant should come forward as soon as possible and must discontinue its participation in the illegal activity concerned. He/she/it must also make full disclosure and cooperate fully with the Authority and the DPP.
In 2010, the Authority held a public consultation regarding proposed amendments to the CIP, one of which was that the current ban on ringleaders being granted immunity be removed. However, the Authority remains of the view that cartel instigators and undertakings that have coerced others to participate in a cartel should be prohibited from being granted immunity. The DPP is considering the proposed reforms and it is understood that the Authority intends publishing a revised CIP later this year.
Future Cases
At the end of 2011, the Authority was pursuing seven cartel investigations, four of which were launched following applications under the CIP. Time will obviously tell where these enquiries lead.
Contributed by Cormac Little
