Authority calls for tougher penalties for cartels

The Competition Authority has urged the Government to introduce stiffer financial penalties against those who obstruct its investigations…

The Competition Authority has urged the Government to introduce stiffer financial penalties against those who obstruct its investigations and tougher sentencing to deter anti-competitive conduct.

The calls were included in a submission to the Department of Enterprise, Trade and Employment in response to a public consultation on the Competition Act 2002, which was announced by Minister for Enterprise Micheál Martin on November 13th last.

At present, those who are convicted of obstructing investigations can be hit with a maximum fine of €3,000 and/or a six-month jail term.

"An amendment . . . that provides for enhanced penalties for obstruction of Competition Authority investigations could include both summary and indictable offences depending upon the severity of the offence," the submission states.

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The competition body also wants changes made in respect of sentencing for those convicted of operating a cartel.

At present, the maximum sentence is five years in jail and a fine of either €4 million or 10 per cent of a company's annual turnover in the year preceding the sentence, whichever is higher.

The competition body wants a "provision that would increase the fine for each calendar year or portion thereof that the cartel was in existence". It adds: "Such a provision would more adequately account for and punish cartel activity spanning a period of years and would be in line with decisions of the European Court of Justice approving increased penalties for each year of the cartel."

The Competition Authority has achieved 18 criminal convictions in the past two years for anti-competitive behaviour.

The authority has also made a number of suggestions for changes to the mergers regime and wants more powers to search premises and seize items relevant to its investigations.

In addition, it wants the act amended to allow for the sharing of information with the Revenue Commissioners and the Department of Social Welfare, which is not currently permitted.

The submission calls for sanctions to be imposed on anyone who retaliates against whistleblowers, industry insiders who are often key to the authority's investigations.

"Explicit statutory prohibitions and penalties for reprisals against whistleblowers would enhance the willingness of those with information to come forward," the Competition Authority states.

Commenting on the submission, Competition Authority chairman Bill Prasifka said: "Adoption of these proposals will help us to use competition policy more effectively to benefit consumers."

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times