Charles Flanagan
Question:4 Mr. Flanagan asked the Tánaiste and Minister for Enterprise, Trade and Employment the role her Department will have in the matter of the proposed sale of a company (details supplied). [12646/01]
Ceisteanna–Questions. Priority Questions. - Company Takeovers
National merger control is governed by the Mergers and Takeovers (Control) Acts, 1978 to 1996. In accordance with these Acts parties to proposed mergers or acquisitions which exceed specified financial thresholds are required to notify me in writing within one month of an offer capable of being accepted. Notification of the proposed sale referred to has not been received.
Where notification of a proposed merger or acquisition is made, my Department carries out an initial investigation, following which I can either clear the proposal or refer it to the Competition Authority for further investigation. If I opt for referral to the Competition Authority, the authority reports back on whether it considers the proposal would be likely to prevent or restrict competition, restrain trade in any goods or services or operate against the common good. I can then either clear the proposal with or without conditions, or prohibit it.
Under EU law large scale mergers and acquisitions which have a Community dimension as defined by EU merger regulations are subject to pre-notification to the EU Commission. While my Department, the Competition Authority and other interested parties can make their views known to the Commission on these cases, the Commission makes the final decision.
Will the Competition Authority have a direct role in the forthcoming sale of Eircom? Does the Minister agree that, in the public interest, knowing the full identity of any successful consortium or consortia is absolutely essential?
It is important, in the public interest, that we know the identity of any consortium or consortia. We cannot enforce competition if we are not fully aware of who the proposed bidders and people in charge of a potential takeover may be. I do not know if the Competition Authority will have a role. It depends on whether the scale is such that it needs to be dealt with in Ireland or by the European Commission. If the purchase is looked at in Ireland, the Minister can refer it to the authority and if it is dealt with by the Commission, the authority can make its views known. I expect the views of the Competition Authority to be sought in relation to something as major as the proposed sale of Eircom.
I have two brief questions. Does the Minister agree with comments recently attributed to the telecommunications regulator, Ms Etain Doyle, who said that Eircom should not be a dominant player in both the fixed residential line market and cable television? In the public interest, does the Minister or her Department have a role in ensuring that the fixed communications proprietor fulfils its obligation to the State by ensuring that the £37 million contract for infrastructural development in the BMW region is fulfilled? Does the State have a role in ensuring that this matter is addressed, particularly given the need to ensure that targets in the national development plan are met?
In relation to the Deputy's second inquiry on when licences are issued or applications are sought for them, there is a debate between what are commonly called the beauty contest and the auction. I favour bids being sought on the basis of scale of coverage, rather than a direct auction to the highest bidder. While the taxpayer may gain from the auction in the short-term, the economy does not in the medium and long-terms. Recently we have seen some huge failures in option-related bids in the EU. Therefore, I certainly share the Deputy's view that we make sure, in so far as we can, that any new licensing regime will be able to provide availability of service. That is very important, particularly if one wants to develop the regions.
The first part of the Deputy's question related to what the regulator said. The Government position is not really the issue here. Once there is fair competition and a dominant position is not being abused, that is what is important. Generally I would favour what the regulator said. Where one company is particularly dominant, it becomes very difficult for others to be able to compete in that kind of market. That is why we must ensure that there is a competition authority which enforces fair and even competition in the marketplace.
It is only in recent years that there have been enforcement powers. In fact, it is only ten years since competition legislation was introduced. More recently, the Government, which the Deputy supported, introduced the enforcement powers for that authority. That is a welcome development. It is important, regardless of size, that we enforce competition.
In view of what the Minister said, will she accept that the matter of extra resources for the Competition Authority is now both urgent and important and that while one must acknowledge improvements in that office in recent times, there is still a problem if the Competition Authority is to be in a position of being ready to meet the challenges, one of which is the subject matter of this question?
Yes, I do agree with that.