Joint Committee on Enterprise, Trade & Employment: CCPC opening statement
February 23, 2021
I am Isolde Goggin, Chairperson of the Competition and Consumer Protection Commission. I am joined by Brian McHugh, Member of the Commission, who has responsibility for our Competition Enforcement and Mergers functions.
I would like to thank the Committee for the opportunity to speak to you today, and to provide our views on the Competition (Amendment) Bill 2021.
As the primary enforcement body for competition law, both the CCPC and our predecessor, the Competition Authority, have used all of our powers and resources to investigate suspected anticompetitive practices, and bring those damaging practices to an end. In doing so we have built up a strong track record of enforcement.
However, developments in enforcement mechanisms have left Ireland out of step with the rest of Europe. Our ability to act is grounded in our statutory powers and therefore, it is essential that those laws provide the CCPC with the right enforcement tools to effectively deter, detect and address white collar crime relating to competition law.
This Bill provides a significant opportunity for major change and will enable the CCPC to be more effective for the benefit of consumers, businesses and the economy as a whole. However, the devil is in the detail and the specifics of how this European legislation is transposed will determine how effective it is.
CCPC’s enforcement powers
Competition law investigations are built on physical and digital evidence and require in-depth economic and legal analysis. We have consistently used our current powers to challenge anticompetitive practices in a wide variety of sectors. We secured Ireland’s first conviction for bid-rigging, and recently we referred a file to the DPP into potential bid-rigging in the procurement of publicly-funded transport services. Last year, we issued preliminary findings against a number of businesses in the motor insurance sector and most recently we secured a High Court order in respect of a commitment agreement with Ticketmaster (further details are provided below).
We have a substantial enforcement track record, but there are areas where we could have done more if we had the same powers as other competition agencies in the EU. For example, at present, the most the CCPC can achieve in a significant amount of competition cases is to seek commitments that the business will cease the practice or behaviour and not do it again. If we cannot obtain commitments ourselves, we can apply to the Courts for a declaration that the behaviour is unlawful and an injunction. In our view, this is not an effective deterrent to practices that harm competition and, ultimately, consumers.
Unlike other competition agencies, the CCPC cannot impose financial sanctions for breaches of competition law. We also cannot operate a leniency programme, which allows for the reduction in fines when a business provides evidence that it has participated in a breach of competition law. Leniency programmes encourage companies to come forward with evidence and result in much more effective and efficient investigations and enforcement.
Secret cartels are extremely damaging and therefore are considered a serious breach of competition law. This type of activity has a very harmful effect on consumers and the wider economy as any or all of the following can happen as a result of businesses coming together to agree prices or to share out a market between them: prices go up while efficiency, innovation and the options available to consumers go down. They are also the most challenging breaches to detect and investigate as, by their nature, they involve a secret conspiracy. The parties often make considerable efforts to hide their involvement from their customers and indeed from the CCPC.
International experience has shown that cartelists have become more sophisticated in using electronic communications technology and social media apps to co-ordinate their behaviour. Indeed, many cartelists work diligently to avoid leaving a paper trail and only communicate verbally on their mobile phones.
For this reason, the CCPC is seeking investigative and surveillance powers which are appropriate to detect white-collar crime. We are very aware that the powers we seek must be balanced with safeguards for the rights of the individual. Currently, for the CCPC to search a premises we must present sufficient evidence to a judge in order to obtain a warrant and we anticipate this level of judicial oversight will be maintained in our new powers.
This Bill will, for the first time in Ireland, allow the use of important enforcement tools commonly used across the EU. The CCPC believes that giving us these tools will fill a significant gap in the existing competition law enforcement regime in Ireland.
The detail of how the regime works is crucial in ensuring that the legislation is effective. From our experience, we know that for there to be a meaningful deterrent, the threat of enforcement must be real – and go beyond reputational damage. The CCPC is of the view that we require the power to adopt infringement decisions, grant immunity from or reductions in fines, make orders, grant remedies and, subject to the appropriate judicial oversight, impose fines in respect of breaches of competition law.
As the Chair of the CCPC, and previously the Chair of the Competition Authority over a number years, I can confidently say that we have spent many years enforcing the law to the best of our ability. I can assure the Committee that the views put before you today come from much consideration over this time.
I firmly believe that the Competition (Amendment) Bill 2021, is a once in a generation opportunity to reform Irish competition law and align our enforcement regime with the rest of the EU, something that is long overdue. These are major changes and the detail of the Bill will be very important if we are to realise the full potential of these reforms and enable the CCPC to be more efficient, effective and impactful when tackling white collar crime in Ireland.
We recognise the CCPC must play its part in this, and in this regard we have been working closely with our parent Department, the Department of Enterprise, Trade and Employment. Both in terms of working through the detail of the legislation and considering the impact such powers will have on our organisation, particularly in ensuring there are sufficient resources, expertise and oversight. Our mission is to make markets work better and we are committed to playing our part in ensuring that this legislation benefits consumers, businesses and ultimately the economy.
We are happy to take any questions and explain further our views in more detail.