Uptick in dawn raids to continue as Irish competition regulator exercises expanded powers

The Competition and Consumer Protection Commission (CCPC) in Ireland undertook extensive investigations and enforcement actions under Irish competition law in the past year. According to its 2023 annual report, the watchdog conducted dawn raids on four businesses, and carried out 68 merger reviews in sectors ranging from car parking to pharmaceuticals. Much of the competition investigation and enforcement activity has been against household names, public transport companies, and the home alarm industry.

Recent dawn raids

• In March, the CCPC carried out an inspection of Ryanair’s headquarters in connection with an investigation into potential breaches of EU competition law concerning abuse of market dominance with reference to Italian online travel agents. The CCPC undertook this inspection following a request by, and in collaboration with, the Italian Competition Authority (AGCM).The lawfulness of the CCPC’s inspection is the subject of an ongoing legal challenge by Ryanair before the Irish High Court.

   

• In February, the CCPC carried out multiple searches of businesses active in the home alarm industry, as part of a criminal competition law investigation into potential price-fixing offences.Legal proceedings were subsequently issued against Phonewatch Ltd. and its subsidiary, Homesecure Ltd., compelling the disclosure of privileged legal material relevant to the CCPC’s investigation.

   

• In December 2023, the CCPC dawn raided several businesses in Cork as part of a criminal investigation into potential competition law breaches in the publicly funded transport sector. This investigation remains ongoing.

Alan Davis, competition law specialist at Pinsent Masons, said: “The CCPC has had a very busy year dealing with several targeted investigations, sometimes in collaboration with international competition authorities. The report demonstrates that the CCPC has not reneged on its promise of increasing its capacity to conduct multiple simultaneous large-scale investigations. Irish businesses need to be cognisant of this increased competition enforcement activity and take the necessary steps to ensure compliance with competition law”.

Notably, the report also shows that the CCPC has grown in size by 18% to over 200 staff, reflecting its commitment to ensuring fair competition and visible enforcement. The CCPC’s growing workforce and caseload are linked to the enhanced fining and surveillance powers given to it under the Competition (Amendment) Act 2022 (2022 Act), which entered into force in September 2023. The 2022 Act has introduced significant changes to the enforcement of competition law in Ireland, following the transposition of the ECN+ Directive (Directive (EU) 2019/1) in Ireland which is designed to ensure that member state national competition authorities have similar powers for investigations and enforcement across the EU.

Under the 2022 Act, the CCPC has been given the ability to issue administrative fines, in addition to issuing criminal proceedings, of up to €10 million or 10% of a company’s annual worldwide turnover for breaches of European or Irish competition law. Fines for criminal liability have also been increased to up to €50 million or 20% of a company’s global turnover.

The 2022 Act has also established a new administrative leniency programme, which allows the CCPC to grant leniency from administrative sanctions to companies that disclose participation in anti-competitive practices. This programme runs in tandem with the CCPC’s criminal cartel immunity programme.

The CCPC’s chairman Brian McHugh indicated in the report that more investigations and enforcement actions are to come: “With the new powers, we intend to move faster, take more cases, and become even more of a deterrent to bad actors in the Irish marketplace,” he said.

Consumer disputes expert Zara West at Pinsent Masons said that it is important for Irish businesses to be fully prepared for unannounced inspections by regulators, because the trend of increased dawn raid activity is expected to continue.

“A full suite of enforcement tools is now available to the CCPC in targeting and investigating perceived anti-competitive practices, which is reflected in the increased levels of dawn raids being conducted on Irish businesses,” she said.

Dawn raids are unannounced inspections that can be carried out by regulators and law enforcement on businesses, or the homes or vehicles of their directors, at any time of the day. The unannounced nature of these raids by regulators, such as the CCPC, means that advance preparation is essential to coordinating an effective response by businesses subject to an unannounced inspection.

“Navigating the balance between co-operating with regulators while also asserting your legal rights, including in particular a right of legal privilege over documentation, is important to consider in any dawn raid investigation as a failure to co-operate with regulators can result in fines being imposed on companies or criminal sanctions for the individuals,” said West.

Legal privilege was recently considered by the Irish High Court in the context of dawn raids, in Commission for Communications Regulation v Eircom Limited. In that case, the High Court considered the effect of the duty on a regulator of maintaining the confidentiality of a regulated entity’s information seized during a dawn raid.

Litigation expert Sarah Twohig of Pinsent Masons said that there are tools available to ensure businesses are well prepared when they are faced with unannounced investigations by regulators in Ireland. The Irish Competition Dawn Raid Tool Kit, provided by Pinsent Masons, is an example of the resources available as a first port of call to brief internal teams.

“The tool provides information for businesses on the immediate steps they need to take upon arrival of officials from the CCPC or European Commission in order to lower the risk of any competition law proceedings ensuing from a dawn raid,” said Twohig.

The CCPC’s latest annual report also highlights its merger control and consumer protection work, in addition to a growing focus on competition investigations and dawn raids.

Co-written by Ciarán Campbell of Pinsent Masons.