The recently published Competition (Amendment) Bill 2011 aims to provide more effective deterrents to individuals or organisations engaging in anti-competitive practices. The Bill is a step towards compliance with the Government’s commitment under the EU/IMF financial support programme to strengthen the enforcement of competition law in Ireland.

The main proposals in the Bill include:

• An increase from five to ten years in the maximum prison sentence for conviction on indictment of a “hard core” competition offence (i.e. agreements and arrangements relating to price-fixing, output restrictions and market sharing).
• An increase in the fines applicable to competition offences.
• An easing of the burden of proof for private plaintiffs taking a follow-on case for damages.
• Provision for the court to make a convicted undertaking liable for the costs and expenses incurred in relation to the investigation, detection and prosecution of the offence.
• An extension of the director disqualification regime to cover non-indictable competition law breaches.
• A prohibition on a person convicted of a competition offence from being eligible for probation (where a judge does not record a conviction in relation to a proven case).

While the proposed increase in penalties demonstrates the seriousness with which breaches of competition law are viewed, it is arguable that the current range of high fines and lengthy periods of imprisonment for cartel offences (up to five years) already have a sufficiently dissuasive effect. The key problem in competition law enforcement in Ireland lies not in the maximum possible level of penalties, but in the low likelihood of detection and punishment.

The proposed provisions on follow-on cases (i.e. actions for damages where breach has already been established) are to be welcomed from the private litigant’s point of view. However, this provision will primarily apply where there have been prior enforcement proceedings by the Competition Authority or the Director of Public Prosecutions and, since public enforcement is infrequent in Ireland, private litigants will continue to face significant evidential difficulties in cases where there is no prior court decision.

The Bill was published in late September and may be subject to change prior to its enactment.

Contributed by Claire Waterson.

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