Dáil Éireann debate -
Thursday, 10 Jun 1993

Vol. 432 No. 2

Mergers, Take-overs and Monopolies (Control) Act, 1978 (Section 2) Order, 1993: Motion.

Minister of State at the Department of Enterprise and Employment (Mr. S. Brennan)

I move:

That Dáil Éireann, pursuant to the provisions of section 2 (6) of the Mergers, Take-overs and Monopolies (Control) Act, 1978 (No. 17 of 1978), hereby confirms the Mergers, Take-overs and Monopolies (Control) Act, 1978 (Section 2) Order, 1993 (S.I. No. 135 of 1993), made under section 2 (4) of the Act, copies of which Order were laid before Dáil Éireann on 25 May, 1993.

The purpose of this resolution is to confirm an order made by the Minister for Enterprise and Employment on 21 May 1993 under the Mergers, Take-overs and Monopolies (Control) Act, 1978 relating to the financial criteria which apply to mergers and take-overs for the purposes of that Act.

The order, which doubles the thresholds under the mergers and take-overs legislation, is in accordance with a specific recommendation of the Moriarty Task Force on the implementation of the Culliton report. The increase will not affect the position of mergers and take-overs proposals involving newspapers, all of which will continue to be notifiable irrespective of the scale of the operations involved.

Since the removal of old borders throughout Europe it is essential that Irish firms be allowed to create the size of enterprise needed to compete in the vastly increased European market place. The present limits, which predate the Single European Act, are now too low and need to be increased.

Allowing them to remain at their lower level creates uncertainty for those who wish to build larger scale operations. These concerns have been expressed by the Moriarty Group, which has recommended increasing the financial limits. The decision to raise the limits is a further step in the implementation of the Culliton report. This measure is, therefore, part of the package of measures which are being taken to ensure that the report is implemented.

The effect of the increase will be to take a significant number of small scale mergers outside the scope of the mergers and take-overs legislation. This action keeps up the momentum in the process of the implementation of Culliton.

The Moriarty recommendation is not a theoretical one; it has practical effects. Looking back at the notifications under the 1978 Act over the past decade, a clear pattern emerges. From a level of almost 50 notifications in 1982 the number has climbed fairly steadily to almost 150 in 1992. The exceptions to his trend are the years 1985 and 1986 where the number of notifications fell below those of 1984. A reasonable explanation of this was the increase in financial thresholds in 1985. The persistent upward trend was not long in reasserting itself. Control of merger activity is essential to safeguard competition. However, it must be recognised that it places a burden on business and that burden must be proportional to the threat to competition.

It is essential, therefore, for the administration to keep in mind the burden it imposes and to keep its procedures under review. This is not solely a question of reviewing thresholds periodically. Time limits and administrative practices also need to be reviewed. Changes in the procedure under the 1978 Act brought about by the Competition Act, 1991 mean that except where a case is referred to the competition authority by the Minister, and such cases are rare, a decision must generally be given within one month of all relevant information being available. As a matter of administrative practice my Department aims for a decision within two weeks. In recent times this objective has been met in the majority of cases. I am anxious to ensure that, without increasing resources for the task, this will continue to be the case. The doubling of thresholds which should reduce the number of notifications will in itself help achieve this aim.

The Moriarty Group also urged that greater competition should continue to be promoted within Ireland, and with increased urgency and vigour in all markets for goods and services. As the House is aware it pointed out that the application of competition policy and of monopoly and merger controls is vital so as to prevent abuse of a dominant position, either in markets for new material inputs or in final products markets.

In essence, a key message emanating from the Culliton report and from the follow-up Moriarty Group, is that competition must become a strategic part of our thinking both for policy makers and the business community. The environment created by the Competition Act, 1991 is essential to prevent any company abusing a dominant position. Indeed, the Competition Act created a new framework to deal with anti-competitive behaviour and the abuse of a dominant position. It enables any party who consider themselves injured by anti-competitive behaviour to seek relief through the courts. Any enterprise excluded from the scope of the 1978 Act by virtue of the present increase in the limits will continue, therefore, to be subject to the Competition Act, 1991.

The Competition Act has been in place since 1991 and has already brought an awareness of the benefits of competition to many businesses and individuals. Much work remains to be done, however, in improving the climate for a more competitive, efficient economy. I can assure the House that this Government will pursue this goal with determination in view of the significant benefits to be gained for the Irish economy at large.

We now have to take a hard look at the structures and rules that regulate business, industry and services. Just because it is the way things are or have always been done, does not mean that it is still appropriate for today's environment. We must examine all aspects of our regulatory environment against the yardstick of competition. Are the legislative and regulatory instruments such that industry or business can operate efficiently, progressively and with benefits for the consumer? With these questions in mind we have begun to look at the many controls restrictions and licensing systems which can operate to restrict competition in trades, professions and services.

What we want to do is to create opportunities, to open doors and to break down barriers — to create a climate for enterprise. By the end of 1993 we will have gone some way towards identifying where we need to move in this direction.

The summer report of the Central Bank also reminded us of the need to look at ways to increase competition. The report advocated greater competition and transparency in non-competitive sectors such as many public utilities and professional services. Public utilities and services will not be immune from our assessments. Already at EC level public utilities such as telecommunications, electricity and gas industries have been viewed as sectors where competition can play a role with benefits for the consumer and for the industries themselves. It is my view that we should undertake our own assessment of our public utilities to ascertain where competition can best serve all our interests. This is a process which we must undertake without delay, as for many of these services, competition from the Single Market and from third countries is just around the corner.

In the same vein, one of the key recommendations of the Moriarty Group accepted by Government was to look at the restrictive arrangements and other limitations which operate to limit entry of suitably qualified people to trades, professions or services. Any suggestions, therefore, that access to any of the professions be limited for any reason other than the safety or welfare of the consumer would be entirely contrary to the task force's recommendation and correspondingly will not be entertained by the Government.

Mergers and take-overs can take place for a variety of reasons, such as economies of scale to be achieved by mutually complementary business operations, new business opportunities, market diversification, expansion and so on. The external growth of businesses does not, however, have to be viewed in negative light in all cases if such development increases efficiency of the undertakings concerned and leads to new employment opportunities, among other things. Thus, while the reasons for, and advantages of, mergers and take-overs are usually directly associated with the enterprises concerned in the first instance, the final result of mergers and take-overs can also be of significant benefit to the economy as a whole. If, however, such proposals result in dominance in the market place to such a degree that effective competition is eroded or eliminated altogether, the adverse effects on the economy can be very serious.

Businesses which are not exposed to the rigours of competition in their own territorial areas often do not have to strive to realise efficiency gains. In addition, their position of relative comfort in the market may tempt them to impose unfair purchase or selling prices or trading conditions, or limit production, all of which would ultimately be against the best interests of the economy.

In these circumstances, therefore, the Mergers, Take-overs and Monopolies (Control) Act, 1978, as amended, imposes a strict requirement on businesses considering mergers or take-overs to notify such proposals to the Minister for Enterprise and Employment in advance of putting them into effect. Under the Act, any proposal which exceeds certain financial limits must be notified to the Minister. These limits, which are specified in section 2 (1) (a) of the Act, currently apply the Act where the value of the gross assets of each of two or more of the enterprises involved in the proposal is not less than £5 million or where the turnover of each of those two or more enterprises is not less than £10 million.

Cases which are notified to the Minister for Enterprise and Employment under the Act are subjected to a detailed assessment by the Department in the first instance with a view to assessing their likely implications for competition, employment and a variety of other considerations with due regard to the interests of the common good. In addition to requiring notification for the Minister's clearance under the Act, a proposed merger or take-over may be the subject of a reference to the Competition Authority and, ultimately, may become subject to an order prohibiting it absolutely or conditionally.

The 1978 Act made special provision, in section 2 (4), for increasing, by order, the amounts specified in the financial limits relating to mergers and take-overs. Any such order also requires confirmation by both Houses within 21 sitting days after presentation, otherwise it will lapse. The present order, which is the second such order providing for an increase in those amounts, was laid before each House on 25 May 1993. The previous order to which I referred earlier was made on 8 July 1985.

It is, in my view, necessary and desirable that the limits which were last amended in 1985 should be increased and the Minister has made the order accordingly. The new limits, as set out in the order and as recommended by the Moriarty Group are £10 million and £20 million for gross assets and turnover respectively, in merger or take-over cases. The new limits proposed in the order should ensure that the provisions of the 1978 Act apply only to the types of enterprises for which it was intended and I commend the motion to the House accordingly.

Mr. R. Bruton

I have no objection to the Order before the House. It makes for sensible bookkeeping. I wish to comment on the wider issue of competition policy being pursued by the Government. I searched the Programme for Government in vain for any real commitment to competition policy. In the programme, competition is hedged around with qualifications included to protect the interests which the Government might wish to serve. The Government has ignored substantial opportunity for gain in this economy through an effective competition policy. I am sure the Minister is aware of a recent independent study carried out by the economists Fitzpatrick and Somerville in which they estimated Ireland could realise gains of £265 million from an effective competition policy which we do not have. Those gains would be partly enjoyed by the consumer and, more importantly, they would be enjoyed where barriers to entry came down and new businesses, employment and output could develop as a result.

I am disturbed that the Government seems to prefer the cosiness of good relations with those businesses that are gaining from uncompetitive practices in the Irish economy to an effective policy that would exploit the opportunities that exist for consumers and those out of work now.

The Competition Authority which was set up by this House some years ago is a toothless Authority by comparison with any similar authorities in EC countries and, indeed, by comparison with the EC Commission. If has no powers to receive complaints from third parties concerning abuses of dominant positions; it has no powers to initiate investigations into anti-competitive practices and it has no powers to prosecute offenders. In effect, it must wait until cases are brought to its attention by companies and it then adjudicates upon them.

It is crazy to have a system here where we expect the consumer, the small person, to take on business giants and effectively take them to court to pursue cases where they may be abusing dominant positions or exploiting competitive advantages. That is not realistic. We introduced a small claims court here because we recognised that consumers cannot effectively complain about items they purchase. Yet while we have done that for simple consumer items we expect people to become involved in this much more complex area and challenge instances of competitive abuse or expect the smaller businesses which might be affected by such anti-competitive behaviour to resource the taking of such cases. It is foolish to introduce further legislation in that area and I would have been more pleased to hear the Minister indicating that he will overhaul the Competition Act and introduce reforms that would correct those defects. That would be much more encouraging than the wishy washy statement in the Moriarty report which is very short on detail.

Quite apart from the defects of the Competition Authority the Government has starved it of resources. A recent article in The Irish Times reported that there are 1,100 cases awaiting decision from the Competition Authority but in the two years of its existence it has decided upon only 17 cases. If that position continued it would take the Authority 100 years to deal with the backlog of cases. On numerous occasions the Government has been told that it has not effectively resourced this Authority. Only three members have been appointed to the Authority and it is my understanding that no decision can be reached without the approval of three members. Therefore, if anyone is out sick or away decisions cannot be taken. The Act provides for the appointment of additional people and I cannot understand why the Government has not appointed sufficient members to deal with the backlog or appointed people temporarily if it does not want to commit itself to permanent increases in staff that may not be required in the long-term. A backlog of cases is building up in the Competition Authority and it is unacceptable that they are being left unaddressed.

I was disappointed that the Minister's speech did not deal with that matter. The research to which I referred earlier indicated the potential for gains of up to £265 million and this was backed up by recommendations that an investment of £5 million could effectively realise those gains. There is need to reform the Act, to devote resources to investigation of potential abuses of power, to survey and study retail prices to identify potential areas where consumers may be ripped off, to resource cases being taken by third parties so that members of the Authority might attend meetings regarding such cases and contribute to effective policy-making emerging in this area from court practice.

Many things could and should be done on a tight schedule and it is a mystery that the Moriarty report, which examined ways to deal with issues quickly and administratively by Government, failed to address this area. The Government could second to the Authority, from its resources in the Department of Enterprise and Employment, the necessary funds to enable the Authority to carry out this work. It rings hollow to hear the Minister of State repeating the Government's commitment to competition and all the virtues that can be wheeled out here but we hear nothing about actual policy action.

The Government seems to have a sneaking regard for companies involved in restrictive practices. I am aware that at least four major State companies are among those against whom the EC Commission has taken action for abuse of dominant position. It must be said that if the Government's flagship companies are abusing dominant positions it is difficult to expect private business to behave differently. It is not surprising that we have, in effect, developed here an extremely "cartelised" economy. Cases have been taken against Ireland in the trade and goods sector alone, which we all recognise is the more competitive sector. Major Irish companies have been before the courts for abuse of dominant position. Those include companies involved in the sugar and fruit business, the manufacture of concrete products, as well as those involved in air transport, the distilling industry, the health insurance industry, the television guide market, etc. Major operators in Ireland are being arranged before the EC courts for abuse of dominant position but they are not being prosecuted under Irish law. It makes a joke of competition law here if the effective pursuit of cases will be taken now at EC level. It makes a nonsense of commitment in this area.

If we are serious about competition policy we must move away from direct political control in this area. It is wrong that Ministers might see this area of policy as one where they can entertain lobby groups or hand out patronage. Unfortunately, as the Takeovers and Monopolies (Control) Act, 1979 is now established it lends itself to such activities. First, it is up to the Minister to take the initiative under this Act; the criteria which are listed in the Act are extremely broad and do not provide anyone approaching a case of a merger with any sense of confidence as to how the Government or any individual Minister might act.

Some examples of this include details such as harmony with Government and regional policy and many other unspecified areas. To achieve radical change in this area we must address this issue much more realistically than the Government did in its reaction to the Moriarty report. We have not examined the non-traded area where much greater abuses exist than those which the EC Commission have highlighted in our traded sector. We need an effective Competition Authority that can eliminate these restrictive practices in trades and professions. It must not be left to the Minister or his Department, as is indicated in the Moriarty report, to do some sort of a trawl where it will be open to all forms of lobbying and very awkward political decisions. We should commit ourselves to a competition policy and allow the independent people who have the responsibility to carry on their work. I would like to see that change and I hope the Minister will come back at the end of the year when he has reviewed the matter and indicate that that is the way forward. There is no future in Ministers simply identifying a few cases in order to give an appearance of commitment in regard to this area but in reality not making that commitment.

Mr. O'Malley

As this is a topic of some importance one would like to have more than ten minutes available to speak on it because it is only occasionally that one can advert to competition policy in this House, despite the fact that I personally regard it as very important.

Has the Minister of State taken into account the recent decision of Mr. Justice Johnson in Meagher v. the Minister for Agriculture, known generally as the angel dust case. It is interesting that on the day we debate this matter the Minister's colleague, the Minister for the Environment, deleted section 3 from the Local Government (Planning and Development) Bill, simply because it would run counter to the decision in the Meagher case. Obviously the Bill was drafted before the decision was given in that case, that is why the Department for the Environment realised the section would not stand up because a Minister does not have power to make an order which changes the provisions of an Act.

It could be argued that this order is different because it will be approved by a positive resolution of this and the other House. Nonetheless it does not get over the principle enunciated in the Meagher case which is that if the Legislature fixes particular figures in legislation, only the Legislature can change them. This matter should be considered by the Minister and the Department. One can argue that in a motion at least the spirit of the requirement is dealt with, but it does not fulfil the letter of the requirement. A motion in which each Member can speak for only ten minutes is not very useful. It is much different from proper consideration of a Bill over a period of perhaps a couple of weeks, with an interval for Committee Stage and Report Stage.

Another point to which I wish to refer which, to my surprise was not adverted to in the Minister's relatively lengthy speech, is the problem that has arisen under the decision of the Competition Authority in the Woodchester and UDT case. I cleared Woodchester and UDT about 18 months ago and it created no difficulty; it was relatively straight-forward. However, it was apparently thought necessary to refer the case to the Competition Authority under either section 4 or section 5 — or both — of the Competition Act, 1991. The Competition Authority, as I am sure the Minister knows, decided in that case that Woodchester and UDT had a concurrent jurisdiction and the fact that the Minister for Industry and Commerce had cleared it under the 1978 Act did not mean it automatically had clearance under sections 4 and 5 of the 1991 Act. That fundamental problem is not adverted to in the Minister's speech.

The Minister went on to quote Culliton, the justification for practically everything nowadays. However, Culliton did not recommend these figures. From a careful reading of the Minister's speech it is obvious he is referring to the Moriarty report although he briefly referred to Culliton at the start of his speech. If Culliton or, more specifically Moriarty, identified a problem it lies in the Woodchester-UDT decision rather than in the thresholds set out under the 1985 order, which do not pose a great problem.

If the CPI is applied to the 1985 figures it will not result in a 100 per cent increase or anything like it. The Minister and the House should bear in mind that simply by removing from the scope of the 1978 Act many mergers and takeovers that might be otherwise examined under it we are not making matters easier in terms of competition. On the contrary, more difficulties may arise for the consumer by excluding all these mergers and takeovers.

I will instance one type of case which is not unusual in many sectors of business here, that is where one large dominant firm which is above even the amended thresholds can pick off all its competitors below the threshold because the requirement under the order is that two or more of the enteprises must comply with one or other of the threshold requirements — a firm must have £10 million in gross assets or £20 million in turnover. If all the competitors of a particular dominant firm do not meet that requirement, which is quite possible, it could pick off each one individually, which is undesirable. That is one aspect of this matter that has always concerned me, and the problem is accentuated by increasing the threshold to such an extent. There seems to be an underlying assumption in the Minister's speech that if firms are removed from control they are made more competitive, but the opposite may well be the case in many instances. The Minister should reflect on that matter because his reasoning is wrong in this regard.

The great weakness in the 1978 Act — I was sponsor of that Act, as I was of the 1991 Act—is that it does not apply to public utilities. I tried very hard at the time to get agreement on this matter. It was not a matter of political controversy that I could not get agreement but it was certainly a matter of enormous effort on the part of certain Departments and the various bodies for whom they had responsibility that this legislation should not apply to them. Happily, in the meantime Europe has come to our rescue in many respects.

Deputy Bruton rightly read out a list of cases dealt with in recent years. I welcome that but it is a great pity that only the European Commission deals with some of these Irish publicly owned giants. In terms of Irish law they are immune to normal competitive requirements, which is regrettable. Let us look at some of the instances in which the Commission has intervened — for example it fined Aer Lingus more than £500,000 for engaging in totally unacceptable restrictive practices. It will obviously have a field day with Telecom if the Government's present proposals go ahead because it is clearly in breach of Article 90. Deputy Bruton listed other, equally important, instances and there will be many more in the future. We should not be dependent on Europe in these matters; our law should reflect these requirements.

Because of the size of the increase and the fact that it is potentially uncompetitive to allow so many firms automatic clearance I might in some circumstances have considered voting against this order, but on balance it is probably better not to do so. Particularly disappointing in the Minister's speech is the fact that he does not refer to the real issues but tends to repeat the concepts as they were some years ago. However, they have changed greatly since.

Deputy Bruton referred to the backlog in the work of the Competition Authority. I am not here to defend the Authority but it is better to put its difficulty in perspective. It received notification of nearly 2,000 cases in one day in October last. The office had to be kept open until midnight to take in the vast volume of paper handed in at the last minute. That was because there was a requirement in the 1991 Act that certain things be notified within 12 months. Once the principle is decided in the bulk of those cases all of them will flow automatically from it. I understand that that has been largely done so that the perceived hold-up, or backlog, is one which will disappear very quickly. It is a once-off matter which will not give rise to problems in the future.

An Ceann Comhairle

The Deputy's time is exhausted. Perhaps he will bring his speech to a close.

Mr. O'Malley

I would have liked to have dealt with general competition principles and to comment on what the Minister said. Unfortunately, I will not have an opportunity to do so. I am sure the Minister appreciates the importance of genuine competition policy and law. Perhaps it can be arranged that we can have a proper debate and not be confined to an impossibly short period as we are now. The more one can convey to the public at large the desirability and the value of such policy and law, the more the consumer, employment and business generally will benefit.

Mr. Rabbitte

To take up the point Deputy O'Malley made, this matter came before the Whips' meeting at which I was coincidentally present. It was proposed by the Government that this should be put through without debate. The remarks we have just heard from Deputies Bruton and O'Malley point to precisely how bad a practice that is, because at the end of the day in the context of industrial policy the theory which underpins competition and the issues that have been touched on here are central. It is not desirable that it be put through the House without debate. I objected to that and the Government Chief Whip agreed the format now. It has become clear that as a format it is inadequate to cope with something as important as this. I understand that the Bill in regard to FÁS will be published tomorrow and, perhaps, that will give us an opportunity to raise the issue again.

There are many questions which the Minister did not deal with in his opening address. He adverted to the fact that this was a further step in the implementation of the recommendations in the Culliton report. There is no reference in the Culliton report to raising the thresholds with which we are dealing. The Moriarty report is a different story, and the chairman, drawing on all his native ingenuity managed to trim back the Culliton report in important respects, obviously with an eye to what this Government might accept. Then the Government trimmed it further. For the Government to now claim it is implementing the Culliton report is not only misleading but an insult to the intelligence of those who take an interest in these things and have read the report. Whatever this has to do with, it does not relate to Culliton.

When I asked what the Government proposed to put through without debate I was assured that it did not include the newspaper industry. The Minister made the point that the increases will not affect the position of mergers and takeovers involving newspapers. I presume that was said deliberately to steer one away from believing that anything pushed through the House might be taken advantage of, for example in the threat under which the Sunday Tribune exists. I notice that on other occasions the Minister confirmed he had informal contacts with the Independent group about that. In summing up, will the Minister comment on that, because it seems that the independent group already controls the two biggest selling Sunday newspapers? To allow it to acquire a controlling interest in the Sunday Tribune would give it effective control of 70 per cent of Sunday newspaper sales. Given that the Independent group already controls the biggest selling daily paper, the Irish Independent, and has a substantial share in the Star and controls around 30 per cent of the provincial press we are now approaching a situation of unhealthy dominance of the newspaper market by one group. That is exacerbated by the fact that the Irish Press group seems to be labouring under difficulties at the moment.

It is not in the interests of democracy that the Government should control or monopolise the press, but neither is it in the interest of democracy that any one commercial group or individual should be able to use its wealth to control or monopolise so much of the press that it has a disproportionate influence over public opinion. Certainly, the experience in the UK where individuals like Rupert Murdoch have been allowed to gobble up great sections of the media has not all been positive. In addition some of the media coverage of various political events are invariably conditioned by the perspective of the particular newspaper group.

I do not hold any brief for the Sunday Tribune. I have on occasion disagreed with the position adopted by its editor, but the paper has generally pursued an independent if sometimes unpredictable editorial line. The interests of democracy will be best served by having a newspaper industry which reflects a diversity of views and political opinion. This would be seriously challenged if Mr. O'Reilly and the Independent group are now allowed to acquire the controlling interest in the Sunday Tribune. The Minister must use his powers to stop that happening.

I notice that the Independent group argue that the percentage share in the marketplace should take into account British newspapers on sale in the Irish market. It all seems to be preparatory to the inevitability of takeover. Notwithstanding the view any Deputy might have about the Sunday Tribune, that would be undesirable. Will the Minister comment?

I would also like the Minister to comment on a central question raised by Deputy O'Malley concerning the implications of the Woodchester UDT case and whether the issues raised by that case are not more important than the question of thresholds. If one does not think about it, the 1978 Act seems reasonable, that the limits were raised in 1985 and are now raised again, but the issues Deputy O'Malley raised in this context require an answer. When the Competition Bill was being put through the House. I said, in relation to a remark made by Deputy Bruton, and as reported at column 1539 of the Official Report for 30 April 1991:

It is ironic that the Minister chooses to abolish the existing mechanisms in favour of a new competition Authority which amazingly can only be triggered by the Minister himself. Surely what is required is an independent, executive, sceptical, suspicious, pro-active Authority which initiate their own investigations and studies, quite apart from the views of whoever happens to be the Minister of the day. Indeed it flies in the face of the arms length trend of recent years in the public service which caused bodies like Telecom Éireann, An Post and even the office of the Ombudsman to be established. It leaves the new Authority open to the vagaries of the political and cultural disposition of the Minister for Industry and Commerce of the day. It is unthinkable in a political culture of patronage and against the backdrop of our recent record of collusion between business and politics that this Minister should advocate the creation of such a critical new Authority as a tool of the Minister rather than as an executive, independent Authority that is its own matter.

That question mark still hangs over the functioning of the Competition Authority. I note the Minister does not say that this order is concerned only with thresholds but deals also with procedures, time limits and so on. He instanced the rule of thumb where, if a matter is not referred by the Minister — which he acknowledges is a rare enough event—there is a kind of two-week rule of thumb within the Department which has been met on almost all occasions.

I had been under the impression that to some extent this measure had been prompted by the fact that, as currently resourced and organised, the Competition Authority cannot deal with the number of cases coming before it and that part of the purpose of this order was to remove from its ambit a good number of prospective mergers that will not now require to be scrutinised.

Minister of State at the Department of Enterprise and Employment (Mr. S. Brennan)

I thank Members for their contributions to this motion. I agree with the view that there are much broader issues involved here than the rather net point of thresholds and procedures. Indeed, we should endeavour to find an occasion on which we can debate them. Certainly I would welcome such an opportunity enormously. It would be unfair to endeavour to deal with those broader issues today, some of which have been touched on, some of which I agree with and others I do not.

The Competition Act, 1991 is now one year old. In its way it was a very fine attempt to put a stamp of competition on our economy. Being a year old — and there having been some cases dealt with under its provisions — it is now appropriate that we should sit down and ascertain where it goes henceforth. I might inform the House that we have decided to do just that, to review the Competition Act, 1991 in detail in the light of the 12 months' experience of its operation. It was a useful and a good attempt to commence the procedure of insisting on competition in our economy and embodying that purpose in one Bill. Therefore, I very much look forward to bringing a review of the provisions of that Act before the House as soon as possible and, perhaps on that occasion, to having a fuller debate on competition policy, a debate which we could usefully have. Competition policy has commenced well under the provisions of that Act but we need to think it through further and do so by reviewing the provisions of that Act rather urgently.

Deputy Richard Bruton asked whether I would overhaul the provisions of the Act. That would be a useful thing to attempt to do once we have reviewed its provisions carefully. Deputy O'Malley asked me about a number of points. I have no advice to the effect that any difficulty was experienced vis-à-vis the angel dust case. I have received no comments from the Attorney General's office in that regard. I am not in a position to respond to the Deputy's direct question other than to say that I do not have any advice that any difficulty is being experienced in that area.

In making my opening remarks today my understanding is that clearly the Minister has power under the legislation to make the order and that the order is being made properly in compliance with that legislation. That is my advice at this point. Of course, the Woodchester case was cleared by the Minister; the Competition Authority was notified by the parties involved. As the House will be aware, the Competition Authority said it had jurisdiction. This has now turned out to be a very difficult, complex area. I require to examine it within the context of the review about which I have just spoken. Indeed, the Woodchester-UDT case must form an urgent and central part of that review. That case has exposed a difficult, complex area which we had not anticipated and which I do not believe had been anticipated by the framers of the original Act.

Deputy O'Malley also asked about the down side of removing companies from the scope of competition, pointing out that in many ways that, in itself, could be anti-competitive. That also is possible but Deputy O'Malley himself instanced 2,000 cases in one day flooding into the Competition Authority, right up to midnight. If one needed any more evidence that that was not necessarily the best way to do everything — that is to have almost everything notified to an over-worked authority — that must be a good example and indeed a good reason one would seek to exempt as many transactions as possible from approval. I take the point that exempting transactions does not always automatically help competition but, in a general sense, the more transactions one can exempt from having to seek either Government or Competition Authority approval the freer will be the system, resulting in fewer cases to be adjudicated on.

I think it was Deputy Richard Bruton who spoke of 1,200 cases awaiting a decision. That cannot be good for business or competition. While there is no easy answer I take the view that one is better off to exempt as many transactions as possible from awaiting decisions in a queue like that and adhere to a system within which one checks up on exceptions rather than endeavour to measure every transaction against a rule laid down.

Deputy Rabbitte asked me to comment on The Sunday Tribune case. I agree with Deputy Rabbitte that The Sunday Tribune fills a very important niche in the Irish newspaper industry and is a highly respected newspaper.

Mr. O'Malley

Would the Minister specify it?

Mr. S. Brennan

It is a highly respected newspaper.

Mr. O'Malley

It gets sheets of paper in brown paper envelopes occasionally, does it not?

Mr. S. Brennan

I might point out that there are no proposals with my Department under the mergers takeovers and monopolies legislation in respect of the Independent Group increasing its share in the Tribune Group since that order prohibiting such an increased was actually made.

Mr. Deasy

Vincent Browne had his pound of flesh recently.

Mr. O'Malley

Is that the reason I have had to endure what I did?

Mr. S. Brennan

I should point out to the Deputy that Independent Newspapers plc. and Tribune Newspaper plc. have initiated legal proceedings by means of an appeal to the High Court. In these circumstances I feel constrained from saying anything further until the High Court makes its decision, other than to express my admiration, as I am sure is the case with all Members, of that very fine newspaper.

Mr. Deasy

But not for its proprietors.

Question put and agreed to.