The detection of cartels is the top enforcement priority of the Irish Competition Authority. Irish competition legislation generally prohibits and renders void arrangements between two or more undertakings that have as their object or effect the restriction or distortion of competition in the trade of any goods or services in the Republic of Ireland. An undertaking found guilty of what is considered a “hard core” offence (e.g. price-fixing or market-sharing) is liable on summary conviction to a fine of up to €5,000, or on conviction on indictment to a fine of up to €5 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 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).
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 Irish Cartel Immunity Programme (“CIP”).
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 Director of Public Prosecutions (“DPP”) is considering the proposed reforms and it is understood that the Authority intends publishing a revised CIP later this year.
Home Heating Oil Cartel
In 2004, following an application under the CIP, the DPP initiated criminal proceedings for price-fixing against 24 individuals and companies involved in the distribution of home heating oil in the west of Ireland. A total of 18 convictions were secured, 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 was made on 3 May 2012 when a jury unanimously found Pat Hegarty, a former oil company employee, 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.
The court also imposed suspended sentences of six and nine months for the respective offences of entering and implementing the cartel on motor dealer, Patrick Duffy. Mr Duffy and his company, Duffy Motors Ltd, each received fines totalling €50,000. Given the fact that fines on undertakings might not always provide an incentive for individuals to obey the law, the Duffy judgment emphasised that serious antitrust law infringements require tough punishment, namely, prison sentences. In deciding the sentences to be imposed, the judge considered various criteria, including the gravity, nature and duration of the offences and the personal circumstances of Mr Duffy and his company. Apart from the guilty plea, the judge rejected various factors put forward in mitigation. For example, he stated that Mr Duffy’s role in the price-fixing conspiracy involved active participation on a long term basis such that his conduct could not be said to be ‘out of character’. The judge also emphasised that the low likelihood of recidivism would not be a mitigating factor.
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 tell whether any of these investigations will result in the imposition of a significant prison sentence by the Irish courts.
Contributed by Cormac Little.
