Mr. Kieran Grace:

I thank the committee for the invitation to brief it on the proposal for a directive of the European Parliament and of the Council to empower the competition authorities of the member states to be more effective enforcers and to ensure the proper functioning of the Internal Market. The stated aims of the proposed directive are to ensure that national competition authorities have effective investigation, decision-making and enforcement tools, are able to impose effective deterrent fines, have a well-designed leniency programme in place which facilitates applying for leniency in multiple jurisdictions, and have sufficient resources to and can enforce the EU competition rules independently. Empowering national competition authorities to be more effective enforcers will benefit all consumers and companies by boosting effective competition enforcement which is an essential building block for the creation of an open, competitive and innovative Internal Market.

The Department supports the overall aims of the proposal. In the invitation to brief the committee, three specific issues were raised and I propose to deal with each of these in turn as they appeared in that invitation. On the issue of the legislative changes that will be needed to give effect to the proposal, this will either be achieved by way of a statutory instrument under the European Communities Act 1972, as amended, or through primary legislation. In this context, the nature of the final agreed text will be an important consideration as to which legislative avenue to pursue and the Department will be guided in this regard by the legal advice of the Office of the Attorney General and the Office of the Parliamentary Counsel. Some of the elements in the proposal are already catered for in current Irish legislation. Therefore, it is likely that any legislative changes will focus on those elements not currently covered in Irish law. These elements include allowing the imposition of fines on undertakings and associations of undertakings which have breached competition law, and providing for the establishment of a leniency programme and associated provisions allowing for immunity from fines for whistleblowers or a reduction in fines for those not qualifying for immunity. The proposal also seeks to provide for co-operation between national administrative competition authorities. This will give a legal standing on what already exists informally through the operation of the European Competition Network, and this will also be an element that needs to be expressly transposed into Irish law.

It should be noted that in giving effect to Regulation 1 of 2003 on the implementation of the rules on competition laid down in Articles 81 - now 101 - and 82 - now 102 - of the treaty, Ireland has designated the Courts Service, the Competition and Consumer Protection Commission, the Commission for Communications Regulation and the Director of Public Prosecutions as national competition authorities. The negotiations on the directive have added to the original definitions for national competition authority and competition authority to include definitions for national administrative competition authority and national judicial competition authority to clarify which authority is being referred to in a given Article. Following clarifications of the proposal at discussions at EU Council working group and Presidency amendments to the proposal, no constitutional issues appear to arise. The situation surrounding administrative fines, Article 12, and requests for the enforcement of decisions imposing fines and period penalty payments, Article 25, have been clarified. This will be kept under review as the discussions develop, especially as new amendments to the proposal may emerge.

On the developments in the proposal to date, the proposal has been discussed at EU Council working group level over ten days up to the end of January 2018. Ireland has been represented by officials from the Department of Business, Enterprise and Innovation, particularly Ms Reilly and Mr. Smith and, when available, officials from the Competition and Consumer Protection Commission have also attended.

These discussions focused on further clarifications of the proposal, as well as explorations by the Presidency of possible amendments to the text in order to address member states' positions. A revised Presidency compromise document was discussed at the Council working group meeting on 5 and 6 February. Member states have proposed amendments to most articles and these are still being debated at the Council working group. There are also consequent amendments to related recitals, which for the most part are seeking to clarify the intent of the text in the body of the directive.

As I indicated earlier, the proposal has now evolved to distinguish between national administrative and national judicial competition authorities. Attempts are being made to align the proposal, where appropriate, with the damages actions directive and with the soft law measures set out in the European competition network, ECN, model leniency programme. There are also amendments that give national administrative competition authorities the power to summons for interview, along with more prescribed details on the co-operation activities of national administrative competition authorities. There is a proposal to insert a new article to cover the general principles governing requests for notification and for the enforcement of decisions imposing fines or penalty payments. We are happy to go through these in more detail if the committee wishes.

No final compromise text has emerged to date on any of the articles and all member states are maintaining a general scrutiny reservation on the proposal. The incumbent Bulgarian Presidency is not currently scheduling any discussion on this issue at ministerial competitiveness Council in the first half of 2018. It is understood that the Committee on Economic and Monetary Affairs, ECON, of the European Parliament will vote on adoption of its draft report on 27 February 2018. A draft opinion was adopted unanimously at a meeting of the European Parliament’s Committee on Internal Market and Consumer Protection, IMCO, on 21 November 2017.

We would be happy to answer any questions the committee may have.