Criminalising Competition Law Offences
| Date | 01 June 2012 |
| DOI | 10.1177/203228441200300205 |
| Published date | 01 June 2012 |
| Subject Matter | Conference Paper |
154 Intersentia
CRIMINALISING COMPETITION
LAWOFFENCES
A Review of Irish Experience
P M*
1. INTRODUCTION
Ireland was one of the rst countries outside the United States to introduce a
comprehensive set of criminal s anctions for breaches of competition law. Some other
European states had, or have since, introduced speci c cartel o ences but since 1996,
all of Ireland’s competition law prohibitions have attracted both crimina l penalties
and civil remedie s. Ireland is thus somewhat unique in t hat all breaches of competition
law constitute criminal o ences. ere are three aspects of the Irish situation which
merit some comment.
First, the Irish decision to cr iminalise cartels ca n be explained, at least in part, by
the fact that the Ir ish Constitution e ectively provides that penal sanctions, including
nes, may only be imposed in the case of crim inal o ences.1 In other words in order
to impose nes on undertakings for engaging in “hard-core”2 cartel behaviour, such
behaviour must be de ned as criminal. It is probably fair to say t hat the case for
imposing na ncial sanct ions on undertak ings found to have engaged in “hard-core”
cartels is general ly accepted. If one accepts that proposition then the Irish de cision to
* e author is a direct or of Compecon Limited a nd was a member of the Ir ish Competition Aut hority
from 1991–2001, including four year s as the Authority’s Direc tor of Enforcement.
1 See, P. Massey and J.D. Cooke (2011), ‘Competition O ence s in Ireland: e Re gime and its Result s’,
in C. Beaton-Wells and A. Ez rachi (eds.), Criminalising Car tels Critical Studie s of an International
Regulatory Movement, Oxford, Har t Publishing.
2 e term “ha rd-core” cartel is generally appl ied to activities such as pric e- xing , bid-rigging and
market-shari ng, activitie s which economists would nor mally descri be as cartels. On e reason for
apply ing the te rm “ hard- core ” to su ch ca rtel behav iour is be caus e in so me OEC D coun trie s, at leas t,
the term car tel was applied to all forms of ag reements between underta kings both horizonta l and
vertical ra ther than being l imited to the trad itional economic de nition of a cartel. As Ha rding
points out, however, such lan guage can also b e seen as conveying a str ong degree of moral censure .
e term “ hard-core” car tel is used throug hout this paper to avoid any pos sible confusion.
C. Harding, (2010), ‘A Pathology of Business C artels: Origi nal Sin or the Chi ld of Regulation?’, New
Journal of Europea n Criminal Law, 1(1), 44.
Crimina lising Competition L awO ences
New Journal of Eu ropean Crimina l Law, Vol.3, Issue 2, 2012 155
introduce criminal o ences, at least with respect to u ndertakings , can be simply
explained as the on ly way under the Constitution by which nes could be imposed on
undertakings found to have engaged in hard-core cartels. In these circumstances
further debate on t he merits or otherwise of criminal isation is probably super uous.
e only real issue is how th is regime has worked in practice.
Second, Irish competition law al so provides that executives of undertak ings which
have engaged in hard-core cartel behaviour may be subject to bot h nes and
imprisonment. is aspect of the decision to introduce criminal sanctions clearly
cannot be explained as being necessitated by the provisions of the Constitution.
Rather it re ec ts a deliberate political decision that cri minal penalties should apply to
individual business executives deemed to be responsible for the hard-core car tel
behaviour of the underta kings which they e ectively control. In terms of the debate
on whether or not crimina l sanctions are appropriate for competition o ences, it is
this aspect of t he Irish position which is probably most relevant.
e thi rd feature of the Irish situation, which deserve s comment, stems from the fact
that the European Union approach to competit ion law also favours na ncial sanctions
for undertakings which are found to have engaged in non-hard-core cartel behaviour
including certain vertical agreements and abuses of dominance. In th is respect the EU
approach di ers from the position in the United States. Again the reason why such
behaviour is de ned as crimina l under Irish law can be expla ined by the fact that, if
Ireland was to follow the EU approach and impose nes on undertakings for such
behaviour, then this required that such behaviour be de ned as constituting a criminal
o ence. From an economics perspect ive, however, there is a reasonable question as to
whether ne s are appropriate in such cases, which is fur ther complicated if the only way
that such nes may be imposed is by de ni ng such practices as crim inal.Serious questions
arise regarding t he practicalities of crimina lising non-hard-core cartel behaviour.
e balance of this article is structured as follows. e historica l development of
competition law in Ireland is described in the following section. e case for
criminal ising hard-core cartels in t he sense of imposing criminal penalties on
individuals for engaging in such behaviour is set out in Sect ion 3. Section 4 then
analyses the Ir ish experience with crimi nalisation of hard-core cartels. Non-hard-core
cartel case s are discussed in Section 5. Some conclusions are outl ined in Section 6.
2. THE EVOLUTION OF IRISH COMPETITION
LEGISLATION3
A form of competition law based on the control of abuse principle was orig inally
introduced in Ireland with the passage of the Restrict ive Trade Practices Act, 1953.
3 For a more detailed des cription of the development of Irish c ompetition law see, P. Massey and D.
Daly, (2003), Competition and R egulation in Ireland e Law and Ec onomics, Cork, Oak Tree Press
and Massey and C ooke (2011) at note 1.
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