Businesses that are found guilty of price fixing and other practices that are anti-competitive will face more severe penalties from today.
The new legislation, which aims to tackle white collar crime and ensure that consumers are not ripped off, increases the fines for breaches of competition law.
Depending on the gravity of the breach, offenders will now face prison terms of up to 10 years and fines of up to €5m.
The new measures also make it easier for the Competition Authority to secure convictions against companies that flout competition laws.
Minister for Enterprise and Innovation Richard Bruton says the new powers will ensure more transparency in the Irish economy.
"For a long time, Ireland has been criticised that we haven't taken competition policy seriously enough," Minister Bruton said.
"Now we are taking it seriously - we're beefing up the enforcement, we're strengthening the powers and we're putting new legal arrangements in place that will make it easier to prosecute offenders."