Before the dawn
The Competition (Amendment) Act 2022 means that corporations in Ireland need to be prepared for an increase in dawn-raid activity. Gráinne Bryan and Laura Kippin buckle up, buttercups
The marked a significant milestone in the regulatory landscape of Ireland, aiming to enhance competition, protect consumers, and promote market efficiency.
Under this updated legislation, it is imperative for corporations operating in Ireland to understand its implications, take proactive steps to ensure compliance, reduce the risk of competition violations in the evolving business environment, and prepare for increased dawn-raid activity related to amended regulatory enforcement.
Recent changes in Irish law and competition enforcement activity are part of a broader trend across many jurisdictions towards intensifying antitrust regulation and investigation.
Key provisions in amended legislation in Ireland include:
1) Strengthened enforcement powers. The Competition (Amendment) Act 2022 grants enhanced enforcement powers to the Competition and Consumer Protection Commission, empowering it to investigate anticompetitive practices more effectively.
2) Merger-control regulations, including stricter regulations on mergers and acquisitions to prevent the creation of monopolies and protect market competition.
3) Prohibition of anti-competitive practices, such as price-fixing, bid rigging, and market allocation agreements that distort competition in the marketplace.
4) Increased fines and penalties for violations of competition law.
Don’t bet on it
Dawn raids are another consideration in the scope of competition compliance and enforcement under the act.
In recent months, the Competition and Consumer Protection Commission has been active in pursuing criminal and competition enforcement in the betting industry, including multiple dawn raids of businesses under investigation.
Dawn-raid investigations must be treated as crisis events that require advance planning, carefully managed response, and attentive follow up.
Missteps during a dawn raid can lead to obstruction penalties, business disruption, new compliance exposures, and confusion among employees, partners and customers.
With proper preparedness, organisations can ensure they are prepared to respond to inspectors’ requests quickly and accurately, uphold visibility into the data involved or seized in the investigation, manage sensitive and personal information appropriately during and after the raid, and coordinate with the authorities to minimise penalty and risk.
There are several steps organisations can take to strengthen compliance with the act and reduce their risk of engaging in activity that might be seen as anti-competitive, as well as prepare for the possibility of encountering a dawn raid due to regulatory suspicion of competition violations.
Often, organisations require support from experts with experience in responding to data requests and investigations from regulatory authorities to help reduce risk, establish readiness before an inquiry, and effectively respond in the event of an investigation or dawn raid.
Key steps that leaders in the field recommend for clients navigating revised enforcement guidelines in Ireland include:
Conducting a compliance review of existing practices, contracts, and policies to determine any misalignments with the new requirements in the act.
These assessments should also examine how the company’s position in one jurisdiction compares with other multinational activity and all applicable competition regulation.
Stakeholder training: With a clear understanding of domestic and global requirements and potential gaps revealed during the compliance review, organisations can implement robust employee training to improve their culture of compliance.
Training programmes should be implemented to educate employees about competition law, how anti-competitive practices are defined and monitored, and the implications of non-compliance.
This may also include mock dawnraid exercises, where organisations can practice responses for each step of an inspection.
This should include assessments of an organisation’s response capabilities, gaps observed, and a plan for how to improve escalation processes, compliance programmes, risk-management approaches, and technical execution.
Establishing a robust compliance framework and response playbooks: This is an important foundational step in strengthening competition compliance, especially in the face of expanding and evolving laws.
With the support of outside experts and counsel, organisations should develop a robust programme that includes regular audits, reporting mechanisms and risk assessments to proactively identify and address potential compliance issues.
Frameworks can also include escalation processes and playbooks to formalise response during a dawn raid, which will help inform stakeholders of roles and responsibilities, enable data access to provide data to inspectors in a timely manner, and identify key personnel whose data may be privileged or include sensitive information that must be segregated during a raid.
Systems assessment: Compliance experts and an organisation’s information-technology personnel must collaborate to assess the organisation’s readiness to identify, access, and collect data from systems in the event of a dawn raid or other type of investigation.
Assessments should address the key data systems used by the organisation, geographic reach of the entity, data-management processes, retention and migration procedures, and employee policies related to data privacy and acceptable use.
Post-investigation review: Often, competition investigations and dawn raids happen under immense time pressure, which can leave an organisation uncertain of the extent of information that has been produced to the Government.
Post-response reviews using digital forensics, analytic, and e-discovery methodologies can help organisations review seized or produced documents to enhance their understanding of the matter and their potential exposures. These reviews are particularly helpful in leniency assessments and decision-making as an investigation progresses.
The implementation of the Competition (Amendment) Act 2022 in Ireland heralds a new era in competition regulation, requiring corporations to reevaluate their business practices and ensure strict adherence to the provisions of the legislation.
By taking proactive steps to understand the act, enhance compliance efforts, and foster a culture of awareness, organisations can mitigate regulatory risks and position themselves for sustained growth and success in the competitive marketplace.
Experts are integral to helping navigate the complexities of the new legislation and advising on how best to approach implementation or respond to regulatory inquiries.
Counsel and outside experts can also help organisations stay informed about industry trends, regulatory updates, and competition-law developments, in support of swift adjustments needed to keep the organisation aligned to changing requirements and market dynamics.
Gráinne Bryan is senior managing director (partner) and head of technology, Ireland and Middle East, at FTI Consulting. Laura Kippin is the managing director of FTI Technology.