People under investigation for "hard-core" competition offences face the possibility of being arrested under the terms of legislation which came into force yesterday.

The Competition Act 2002 raises the maximum jail sentence for serious anti-competition offences from two to five years. Under criminal law persons under investigation for crimes which carry sentences of five years or over may be arrested as part of those inquiries.

Hard-core offences under the Act are such matters as price-fixing, market-sharing, bid-rigging and limiting production to create false shortages. Persons found guilty of such offences can also be fined up to €4 million under the new Act.

The Competition Authority now numbers two Garda officers among its staff and is in the process of recruiting another.

No one has ever been charged by the authority with an indictable offence although files have been sent to the Director of Public Prosecutions over recent years.

The order to bring the 2002 Act into law was signed by the Tánaiste, Ms Harney, yesterday. "We are providing real teeth to the authority to police competition effectively and to ensure that the interests of consumers are fully protected," she said.

Under the new law, raids can be conducted not just on the business premises of companies being investigated but also on the homes of those suspected of orchestrating anti-competitive practices.

The law introduces "presumptions" which will make it easier to secure convictions. These include the presumption that a letter from one person to another was sent and that the statements in the letter are true. The presumptions apply unless they can be shown to be incorrect. They are being introduced to change the standard rules of evidence for competition trials.

The Act depoliticises merger and takeover law, except in the case of media takeovers. Up to yesterday, mergers and takeovers were notified to the Minister for Enterprise, Trade and Employment, who could decide to refer the issue to the Competition Authority for a report and recommendations. The final decision rested with the Minister who could make a decision based on competition criteria and assessment of the common good.

The Department and the Minister have now been removed from the process. The Competition Authority is now the body which must be informed of mergers and takeovers. It will rule on whether to clear any such developments solely on the basis of competition criteria. Most other EU member-states retain some public interest criteria for this process.

In relation to mergers and takeovers in the media, the Minister may intervene and make a decision on public interest grounds but only where the Competition Authority has approved a merger or takeover. The Minister may not intervene in cases where a merger or takeover has been refused.

The new law also makes the Competition Authority more autonomous. Up to yesterday the accounting officer for the authority was the secretary-general of the Department of Enterprise, Trade and Employment, and its employees were employed by the Civil Service Commission. Now the authority's chairman, Dr John Fingleton, will be accountable to the Dáil Committee of Public Accounts. Furthermore, the authority will be in charge of recruiting its own staff. The authority will continue to be funded by the Exchequer.

Ms Harney said the new powers would make it easier "to root out and punish hard-core competition offences such as price-fixing".