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Dáil Éireann debate -
Wednesday, 27 Mar 2002

Vol. 551 No. 3

Competition Bill, 2001 [ Seanad ] : Report and Final Stages.

A recommittal of the Bill is necessary in respect of amendment No. 1 as it does not arise out of Committee proceedings.

Bill recommitted in respect of amendment No. 1.

Amendments Nos. 1 and 42 are consequential on amendment No. 43. Amendments Nos. 1, 42 and 43 can be taken together by agreement.

I move amendment No. 1:

In page 5, line 24, after "ENACTMENTS," to insert "TO AMEND THE INDUSTRIAL AND PROVIDENT SOCIETIES ACT, 1893, WITH RESPECT TO THE REQUIREMENTS FOR CERTAIN SPECIAL RESOLUTIONS THEREUNDER,".

Last week on Committee Stage I indicated my intention to introduce on Report Stage an amendment to the Industrial and Provident Societies Act, 1893. The purpose of this is to facilitate structural change in the co-operative sector and so deliver on a commitment given in the social partnership agreement of 2000. The amendment proposes to relax the voting requirements that apply to co-ops under section 51 of the 1893 Act for the purposes of effecting a change of name under section 52 of that Act and an amalgamation with, or transfer of engagements to, another co-op under section 53.

Amendment No. 43 is a substantive amendment. It was intended to introduce this amendment as part of a separate Bill to modernise industrial and provident societies legislation. However, the drafting of heads of such a Bill has been delayed. Given the mood in the House today, I am anxious to ensure that this Dáil approves the current provisions. Amendments Nos. 1 and 42 are consequential on the substantive amendment. Amendment No. 1 amends the Long Title of this Bill. Amendment No. 42 repeals the Industrial and Provident Societies (Amendment) Act, 1971, which is considered redundant in light of the substantive amendment.

I thank the Minister for making her briefing notes from her Department available on Committee Stage, albeit late in the day. It is surprising that this Bill should be so substantially amended at this late stage. There appears to be no other reason than the imminent demise of the Dáil. Whether long-term difficulties will arise because the House did not deem it prudent to introduce an industrial and provident societies (amendment) Bill, we do not know. However, I have no difficulty with the amendment and welcome the thrust of what the Minister said. It is important in the context of representations made by the co-operative movement, although it is unusual to see a Bill amended like this where two sections are substituted for an entire amending piece of legislation.

I do not object to the amendment but, as Deputy Flanagan stated, this is not the ideal way to enact legislation. Our experience with this Bill has been unsatisfactory simply because of the timetable. It is unfortunate that a Bill, which is close to the Minister's heart, is getting inadequate scrutiny because we are in the dying days of the Government and there are other pressures on Deputies.

We agreed to the Bill being processed because nobody in the House wants to obstruct measures that are designed to have a positive effect for consumers, whether in the stables of life such as bread and milk or something like concrete blocks. No one has a vested interest in restraint of trade or anti-competitive practices, but the Bill merits more scrutiny than we can give it tonight while the insertion in it of what is really a separate Bill at this late stage is unsatisfactory. However I will not object to it.

I recognise that the Government is under great pressure to enact this Bill in the run-up to the general election, but this legislation has implications for all trade and it is unfortunate that it is being guillotined. The Minister has taken on board amendments proposed by Deputy Flanagan and myself last week and the Bill will go through the Seanad tomorrow.

The Competition Authority plays an important role but it has not yet made inroads into the development of commerce and trade. The authority ought to help competition as that is important for the development of trade and business.

As Deputy Rabbitte stated, the new section introduces further provisions, but I support my colleagues in not opposing it. This legislation has been discussed for years and it is unfortunate that we do not have more time to discuss its many amendments.

Amendment agreed to.
Bill reported with amendment.

Amendments Nos. 2 and 3 are cognate and may be discussed together, by agreement.

I move amendment No. 2:

In page 8, line 35, after "any" to insert "arrangements constituting".

On Committee Stage I accepted the principle of an amendment tabled by Deputies Flanagan and Perry to clarify the terms of sections 4(8) and 5(3). Since then the parliamentary counsel advised that further amending was necessary to ensure the precision of the wording and, accordingly, I propose amendments Nos. 2 and 3.

Amendment agreed to.

I move amendment No. 3:

In page 9, line 13, after "any", to insert "arrangements constituting".

Amendment agreed to.

Amendments Nos. 5, 6, 7, and 8 form an alternative composite proposal to amendment No. 4, and all may be discussed together by agreement.

I move amendment No. 4:

In page 9, to delete lines 24 to 36.

I move this amendment in the knowledge that the Minister will not have a change of heart at this late stage on this aspect of the Bill in which we are taking a major step. We are in a relatively new area of law and reversing the traditional burden of proof as, under this legislation, the Minister will incorporate a presumption of guilt. The onus will be on the defendant to prove that he or she is innocent. This is a rebuttable presumption which will have a major effect. The Minister has narrowed the implications of it by excising the word "effect" from the Bill as introduced into the Seanad, which is an improvement, but the defendant must prove other than the charge or else the presumption is one of guilt. Removal of that word means that it will be less unwieldy, expensive and shorter to establish the case to be brought, but it is a road that we should go down with some trepidation, notwithstanding the difficulty in bringing home charges in this area. It is likely now to be incorporated into other areas of law, but the Minister will probably not change her mind.

The answer to that is "no." In view of the concerns expressed about section 6(2), I looked at the drafting again to see if it were possible to tighten further the provisions and am now proposing amendments Nos. 5, 6, 7 and 8, which make it clear that the presumption will apply only where the purpose of the agreement, decision or concerted practice is to fix price, share markets or limit output. An agreement which has a different purpose, but inciden tally does one of these, is not covered by the provision. What is now provided is that where the purpose of an agreement, decision or concerted practice is to fix the price, share markets or limit production, it will be presumed that the object is the prevention, restriction or distortion of competition. I cannot think of a more reasonable presumption and, accordingly, I cannot accept amendment No. 4 which seeks to limit the provision.

I accept that the Minister has modified her original position somewhat and I recognise the futility of proceeding.

Amendment, by leave, withdrawn.

I move amendment No. 5:

In page 9, line 27, to delete "which" and substitute "the purpose of which is to".

Amendment agreed to.

I move amendment No. 6:

In page 9, line 28, to delete "fixes" and substitute "fix".

Amendment agreed to.

I move amendment No. 7:

In page 9, line 31, to delete "limits" and substitute "limit".

Amendment agreed to.

I move amendment No. 8:

In page 9, line 32, to delete "shares" and substitute "share".

Amendment agreed to.

Amendment No. 9 is in the name of the Minister. Amendment No. 10 is related and amendment No. 11 is an alternative to amendment No. 10. It is proposed to discuss amendments Nos. 9, 10 and 11 together, by agreement.

I move amendment No. 9:

In page 9, to delete lines 37 to 44.

The fact that I was giving further consideration to sections 6(3) and 7(2) and seeking legal advice on the matter was signalled on Committee Stage. My immediate cause of concern was that the defence may not be consistent with the proper application of EU law, and one of the objectives of the Bill is to provide for Articles 81 and 82 to be applied by the competent national authorities. Having received advice from the Attorney General, I am now satisfied that the defence cannot be imported into the Article 81 or Article 82 prohibition. It may be possible to retain it in relation to breaches of sections 4 or 5 but I am not in favour of doing so for a number of reasons. First, allowing the defence where national law is breached but where EU law is not breached would greatly complicate the enforcement regime.

Second, I consider that the justification for such a defence has largely disappeared since it was included in our law in 1996. At that time, the criminalisation of breaches of criminal law was novel. There was uncertainty in the public mind as to the scope of competition rules and the defence provided some reassurances that the business people would not be at risk of jail for inadvertent breaches of the legislation. Things have changed considerably since then. We have a large body of authority decisions which clarify the scope and application of the law. The authority has issued guidelines indicating that, as a general rule, it intends to prosecute only for the more serious breaches of the law, essentially for cartel activities, and nobody could be unaware of the anti-competitive nature of such activities. Finally, this Bill eliminates jail sentences for less serious breaches of the law. Having regard to these developments, there is no continuing justification for the defence and I propose to delete it.

Deputy Flanagan's amendment No. 11 seeks to exempt farmers and farmers' associations from the application of Article 81(1). It has been said that the proposed amendment mirrors an exemption that already exists in EU law. There is some truth in this but it is only part of the story. The wording of the proposed amendment is based on wording contained in Article 2(1) of Regulation 26/62 which establishes competition rules for the agriculture sector. Article 1 of that regulation provides that Articles 81 and 82 of the treaty, which contain the generally applicable competition rules, shall apply to the agricultural sector. Article 2 provides for certain exemptions from Article 81(1) which are limited in their application and have been strictly construed. Article 2(1) provides that Article 81(1) of the treaty "shall not apply to agreements, decisions and practices of farmers, farmers' associations or associations of such associations belonging to a Single Market which concern the production or sale of agricultural products or the use of joint facilities for the storage, treatment or processing of agricultural products, and under which there is no obligation to charge identical prices unless the Commission finds that competition is thereby excluded or that the objectives of Article 33 are jeopardised".

The proposed amendment is clearly based on this provision but crucially omits the qualifying phrases to the effect that the exemption operates only where "there is no obligation to charge identical prices" and "unless the Commission finds that competition is thereby excluded". The article is clearly intended to legitimise the core activities of farming co-operatives but it specifically excludes from the exemption agreement decisions or concerted practices which fix prices or eliminate competition. I find it a little disin genuous of the proposer that these critical qualifications of the exemption are not referred to in the proposed amendment. Regulation 26/62 is part of our law. It is directly applicable and can be relied upon by farmers' organisations. There is no need to repeat it in this Bill and I do not believe that I should, or that I am in a position to, provide for a broader exemption in the Bill as appears to be intended by the amendment.

Farmers have a great deal to gain from competition law. Farmers are also buyers of products and services and the rigorous application of competition law can have a significant impact on their own costs. For example, the authority has acted to prevent vets from setting prices and is currently studying competition in the veterinary sector. The authority also took a lead role in the European Commission investigation into the worldwide vitamins cartel which, as with the famous lysine cartel, would have raised the price of animal foodstuffs. Farmers also have a considerable interest in seeing effective competition operate in many services markets such as banking and insurance, which significantly affect their costs.

I have always responded quickly when farmers' organisations complained of unfair or anti-competitive practices, for example, when I established the independent group to examine anti-competitive practices in the beef industry or my intervention in the sugar beet dispute where farmers complained about the behaviour of a monopoly buyer.

As for the Competition Authority, I am not aware of any situation where it has interfered with activities by farmers' organisations that comply with the provisions of Regulation 26/62. The chairman, who, like myself, comes from a farming background, will sit down with the farming organisations to discuss with them the application of competition law in that sector and how they can ensure their activities comply with the law. In these circumstances, I cannot accept Deputy Flanagan's amendment.

It is unfortunate that these amendments are being taken together because there is not much of a relationship between amendments Nos. 9 and 10 on the one hand and amendment No. 11, and it is clear from the Minister's contribution that there is no relationship between them.

As far as amendment No. 10 is concerned, it appears we are removing what was a bona fide defence and in tandem with a rejection by the Minister of Deputy Rabbitte's previous amendment, we can see a further withering away of the position of a defendant. That should give rise to some concern. However, I wish to reserve the bulk of my contribution to my own amendment No. 11.

Having listened to the Minister, I am still concerned about the absence of specific reference in the legislation to the unique position of farmers as food producers. The Minister said, among other things, that farmers had nothing to fear from competition but farmers have no choice in the matter of the Common Agricultural Policy. The whole thrust of the Common Agricultural Policy is not pro-competition but rather the preservation of a vibrant rural economy. That conflicts with naked competition in a way that presents the farmer with a major difficulty. It is not unreasonable that this competition legislation would have specific reference to the treaty articles, particularly EU Regulation 17/62 and 26/62. The amendment merely reflects in specific terms reference in the EU Regulation 26/62. We should have an explicit recognition in law of the right of a farmer organisation to negotiate on behalf of its members.

The reality of Irish farming in 2002 is that farmers must combine to have a negotiating position. Allowing individual farmers a right to negotiate a price is merely reflective of a position of great weakness. We have given due recognition to farmer organisations and farm associations over the years, stitched in, as that group is, as a pillar of social partnership, which is something I very much welcome. Farm organisations constitute a bona fide social partner. If left to the harsh winds of the market, the individual farmer would be defenceless. He or she would be reduced to a position of great weakness and merely left as a price taker.

We are dealing with this matter quite late in the day because of time constraints and rushed legislation and one of the difficulties is that we will not have sufficient time to deal with the fairly substantial consequences that could ensue. I do not accept the fig leaf that the Tánaiste offered by saying that the chairman of the Competition Authority will sit down with the farmers. That is absolutely meaningless in terms of a way forward or a need to recognise the right of the farm organisations to do what they have been doing quite successfully and of necessity on behalf of their members over the past number of years.

Unless specific reference is stitched into this legislation, a flimsy promise that talks will take place is little more than meaningless. I am not sure what avenue is open to the Tánaiste for a further review of this matter. I am not sure of the extent to which the Seanad will have an opportunity to debate amendments again, given that it has already done so. I impress on the Minister the need to engage in public debate on this issue. I know that she and her officials have been examining this situation, albeit behind closed doors. This is an important issue. Unless this Bill is amended along the lines of amendment No. 11, it will be damaging to farmers.

Mr. Matt Dempsey, who is widely respected in matters rural and agricultural, said that this Bill represents a unique chance to stitch into Irish law practices and principles that are the norm in continental Europe. We are not asking for a specific exemption for Irish farmers or that the Irish producer should be treat differently from his or her European colleagues. We merely want to give statutory recognition to EU regulations and make explicit reference in our national legislation to something that is the norm throughout the European Union. Without having such an assurance explicitly referred to in our legislation, we are putting farmers in a position of great weakness. To suggest that talks might take place is insufficient in the circumstances.

I ask the Minister to review her stance and accept my amendment. She seems to suggest that the articles already have legal effect within our jurisdiction. If that is the case, then the amendment cannot be in any way harmful. My fear is that at some future date, a chairman of the Competition Authority who is not from a farming background, which could happen at any time in the future, could have a completely different view on this matter. The soundings from the Competition Authority before Christmas in the context of the beet dispute were sufficient to set off alarm bells throughout rural Ireland and in the farming community. I am most anxious that this amendment be pressed.

Amendment agreed to.

I move amendment No. 10:

In page 10, to delete lines 40 to 45.

Is the amendment agreed to?

It is reluctantly agreed to. Agreement takes away my defence.

Amendment agreed to.

Amendment No. 11 cannot be moved as amendment No. 10 is decided on. Amendment No. 20 is cognate to amendment No. 12 and they may be taken together by agreement.

Amendment No. 11 not moved.

I move amendment No. 12:

In page 12, lines 27 and 28, to delete ", manager, or other similar officer of the undertaking," and substitute "of the undertaking or a person employed by it whose duties included making decisions that, to a significant extent, could have affected the management of the undertaking,".

I wish to advise the House that there is an error in this amendment. Rather than amending subsection (6) of section 8, it should amend subsection (7) of that section. The correct text, therefore, of the amendment should be as follows:

In page 12, lines 34 to 36, to delete "a director, manager or other similar officer of the undertaking concerned," and to substitute "a director of the undertaking concerned or a person employed by it whose duties included mak ing decisions that, to a significant extent, could have affected the management of the undertaking,".

These amendments arise from the Committee Stage debate. At that time, Deputies Rabbitte and Flanagan pointed out that the term "manager" was sweeping and could cover a person who holds a relatively junior position in an undertaking. Given the scale of the liability provided for in the Bill, I agreed at the time that it would be appropriate to limit the scope of these presumptions to those who hold senior positions in the undertaking concerned.

Following the advice of the parliamentary counsel, I tabled these amendments to introduce a more clear-cut wording.

This is a good change which I welcome. There is too much responsibility on the role of the manager of a company. Deputy Rabbitte made that point. It would be an outrageous imposition on any staff member to take the fall for the owner of a company. I am amazed that such a provision was included in the first instance, but at least wisdom has prevailed and the Minister has agreed to this change.

Amendment No. 13 is in the name of Deputy Rabbitte. If it is agreeable to the House, we will take amendment No. 13 now, as it overlaps with amendment No. 12? Is that agreed? Agreed.

Amendment No. 13 reads:

In page 12, to delete lines 33 to 43.

The argument for making this amendment is similar to the argument I made about the appropriateness of this kind of presumption being made. I welcome the change made by the Minister in amendment No. 12. I was puzzled, in between watching Ian Harte score the first goal and going back to this Bill, about how this related to subsection 6 but all has now been revealed. It is an improvement and, as Deputy Perry says, it would be entirely wrong for someone who has the title of manager, but who could be a relatively lowly person in the enterprise, to be automatically presumed responsible.

The argument in respect of my amendment is about whether it should be presumed that a person, defined as it now is – a person of some responsibility, admittedly, would have consented to the commission of the offence by the undertaking unless he can prove otherwise. To reverse the normal burden of proof is to place a huge responsibility on the person concerned. Notwithstanding the Tánaiste's having limited the import of the term "manager" or narrowed its scope – it could have had a very wide sweep in its application – I do not know why the prosecution should not be required to prove what is being asserted here rather than the assumption being made that the person can somehow automatically be presumed to have consented to the commission of the offence that is contemplated by subsection (7).

The Minister said she was changing a word in amendment No. 12.

I move amendment No. 1 to amendment No. 12:

In page 12, lines 34 to 36, to delete "a director, manager or other similar officer of the undertaking concerned" and to substitute "a director of the undertaking concerned or a person employed by it whose duties included making decisions that, to a significant extent, could have affected the management of the undertaking,".

We have not even seen this.

I understand it was circulated to the Deputies' offices today.

I will not make an issue of this but I would like it recorded that about 24 hours after the taking of Committee Stage last week, the office of the Ceann Comhairle refused to accept a written amendment from me on the basis of a new practice introduced by the Ceann Comhairle for amendments. I want to point out that the practice seems to have been abandoned.

Is the amendment agreed to?

I take it my comment has not provoked a response from the Leas-Cheann Comhairle.

The Chair will not respond in the middle of Report Stage.

The Chair will agree that it has created a precedent.

No, it was a correction by the Tánaiste on this occasion.

Amendment to amendment agreed to.
Amendment No. 12, as amended, agreed to.

I move amendment No. 13:

In page 12, to delete lines 33 to 43.

In the light of the changes made to subsection (7) by virtue of my earlier amendment, whereby the class of persons who can be made liable has been confined to senior personnel only, I hope that the Deputy can consider withdrawing his amendment.

Amendment, by leave, withdrawn.

I move amendment No. 13a:

In page 12, line 41, to delete "subsection (7)" and substitute "subsections (6) and (7)".

Following a review of section 8 the draftsman has noted the need for a minor technical amendment. This has been introduced in the interests of clarity and mirrors the provision in the existing legislation.

Amendment agreed to.

Amendment No. 14 arises from Committee Stage proceedings. Amendment No. 15 is related and the two amendments may be discussed together by agreement.

I move amendment No. 14:

In page 13, to delete lines 44 and 45 and in page 14, to delete lines 1 to 38.

The arguments are similar for this amendment. I do not know whether a person can be held vicariously liable for a criminal offence or whether that would stand a constitutional test. I do not know why the jury cannot be allowed to decide. Subsection (5), for example, does away with the requirement for proof:

Where an authorised officer who, in the exercise of his or her powers under section 45, has removed one or more documents from any place, gives evidence in the proceedings under this Act that to the best of the authorised officer's knowledge and belief, the material is the property of any person, then the material shall be presumed, unless the contrary is shown, to be the property of that person.

This is again a reversal of the normal evidentiary burden and does away with the requirement for proof. I would be surprised if this is not tested.

There does not appear to be any room here for due process. The right, for example, to cross-examine appears not to exist at all. I wonder about the sweeping nature of the sections in terms of admissibility. I agree with Deputy Rabitte's point about section 12 although my own deletion refers more to section 13. This is entirely contrary to the concept of due process. Notwithstanding the difficulties of which we spoke on Second and Committee Stages, I do not think that one can discard the presumption of innocence and the constitutional right to due process, the right to examine and cross-examine or to probe and question. These fundamental rights appear now to be seriously diminished, if not altogether wiped out. I feel that great difficulty will result from this and I question its wisdom.

Where did this proposal come from? It was certainly not suggested by the Competition and Mergers Review Group. It infringes both the Irish Constitution and the European Convention on Human Rights. This is a bizarre departure from normal practice in a trial where a jury is provided with an affidavit sworn by a specially qualified person and summarised into any transaction. I am not a legal expert but this is quite an alteration. It would not be normal, in a summary case, that all the evidence would be heard on cross-examination. From my limited knowledge of this, it appears most unusual. Who recommended the inclusion of this provision?

I did not dream it up.

I would say the Attorney General's arm is in it somewhere.

It came from the review group.

Yes and that group was chaired by an eminent senior counsel, Michael Collins. The Law Society which is very concerned about defendants' rights has raised no objections to this.

Having re-examined the relevant part of the review group's report, I am satisfied these provisions are justified and necessary and do not undermine the constitutional rights of defendants. The review group considered that provisions along these lines were necessary because of the particular difficulties facing the prosecution in competition law cases. On the presumption as to authorship of a document and treating statements in documents as admissions, the report states, "The review group has been advised that the shifting of the burden in such circumstances is unlikely to be regarded as unreasonable or unconstitutional."

In the light of these factors, I am satisfied the provisions are justified and necessary and I cannot, therefore, accept the amendments.

Is the amendment being pressed?

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

Amendment No. 15 has already been discussed with amendment No. 14.

Amendment No. 15 not moved.

Amendment No. 16 arises out of Committee proceedings. Amendment No. 18 is consequential and amendment No. 19 is related. Amendments Nos. 16, 18 and 19 will be taken together by agreement. Is that agreed? Agreed.

Bill recommitted in respect of amendments Nos. 16 to 19, inclusive.

I move amendment No. 16:

In page 16, between lines 14 and 15, to insert the following:

"(3) The Director of Telecommunications Regulation, the Commission for Energy Regulation and the Central Bank shall have a right of action under this subsection in respect of an abuse which is prohibited under section 5 or by Article 82 of the Treaty.”.

I am reluctant to open this debate again. The Minister's views are fixed. I am not sure if she has changed anything since last Friday evening. Perhaps I should have requested in subsection (3) that other regulators "may" have a right rather than "shall" have a right. This issue will arise in the future as we expand and develop the importance of regulators in the telecom and energy areas. There will be many such areas and that is to be welcomed. The maintenance of a monopoly for the Competition Authority will have to be changed. It may be some years before we return to this legislation. We should leave the door open to enable regulators to engage in the type of activities that are very much consumer orientated.

The Minister will agree that the consumer imperative in this legislation is vital and it runs right through the Bill. Opening up, empowering and enabling the regulators to act in the interests of the consumer is of great importance. I had hoped the Minister was not as rigid on this as she appeared. We should provide that regulators may have such a power rather than imposing the requirement on them. I would stake money on this and say these powers will be given to regulators within the next ten years. The consumer will require it and the legislation would be all the better if we did this.

I support Deputy Flanagan on this very important point. The role of the regulator has been developed in recent years. The Competition Authority has not, up to now, been empowered to do a great deal. Competition is very important and by virtue of its name, the Competition Authority should also face competition. The development of competition is of benefit to the consumer. It is important, given that so many decisions in this area are made outside this House, that we embrace all the regulatory authorities and ensure they are given a competitive edge. The Competition Authority should be able to withstand public scrutiny. It will be the ultimate body with all the say. The position of regulator has been developed by Government. The Minister is inhibiting its power by not agreeing to Deputy Flanagan's amendment. That will happen in the years to come.

It would be undesirable to frag ment responsibility for the enforcement of competition law. That would inevitably result if we confer these functions on the sectoral bodies concerned. As I indicated on Committee Stage, such changes would be likely to lead to inconsistency and legal uncertainty. This could be particularly injurious to the development of newly liberalised markets as legal uncertainty is likely to deter entry to those markets.

It should be noted that the Competition and Mergers Review Group considered the issue and concluded that the authority should retain exclusive jurisdiction to administer competition law in all sectors in the economy.

Is the amendment being pressed?

Amendment, by leave, withdrawn.

I move amendment No. 17:

In page 16, between lines 26 and 27, to insert the following:

"(6) Exemplary damages shall be determined by the Court and shall be not less than double the amount of damages awarded by the Court.".

I spoke about the concept of exemplary damages on Committee Stage and the Minister ruled it out of hand. The more I think about it, the more appropriate I think it would be. Reading back over recent case law, juries have awarded exemplary damages and the concept, in terms of exemplary damages being associated with punitive damages, has developed whereby the court awards an amount of compensation arising out of an injustice, the taking away of a person's rights or a person whose right is vindicated through the courts being awarded an amount of punitive damages in recognition of the damage done rather than receiving general or special damages which are awarded through the courts on a daily basis. It is important that we develop the concept of exemplary damages.

I was rather interested in the comments made by the sitting judge in the celebrated case of Geraldine Kennedy, where the concept of exemplary damages was adjudicated upon in the court. It was interesting to see how the concept developed over the years. That was one of the last times the court had an opportunity to stitch into the record a written published judgment of what is meant by exemplary damages. There will be cases of abuse under this legislation and court actions will vindicate consumers' rights. An appropriate measure of damages could be "exemplary damages". I have no options because we are at the end of the road. My proposal is reasonable and it should stand, even though it does not have much chance of success.

The courts are very reluctant to grant exemplary damages and this amendment would make them even more reluctant. I agree with the Deputy's objective but it would be counter productive and, therefore, I cannot accept the amendment.

Amendment, by leave, withdrawn.
Amendment Nos. 18 and 19 not moved.

I move amendment No. 20:

In page 16, lines 41 and 42, to delete ", manager and similar officer of the undertaking," and substitute "of the undertaking and person employed by it whose duties included making decisions that, to a significant extent, could have affected the management of the undertaking,".

Amendment agreed to.

Amendment No. 26 is consequential on amendment No. 21. Amendment Nos. 24 and 25 are consequential on amendment No. 26. The amendments may be discussed together by agreement.

I move amendment No. 21:

In page 17, to delete line 25 and substitute the following:

"undertakings, or

(c) the result of an acquisition by one undertaking (the 'first undertaking') of the assets, including goodwill, (or a substantial part of the assets) of another undertaking (the 'second undertaking') is to place the first undertaking in a position to replace (or substantially to replace) the second undertaking in the business or, as appropriate, the part concerned of the business in which that undertaking was engaged immediately before the acquisition.”.

These amendments deal with an issue that was raised by both Deputies Flanagan and Perry where one undertaking acquires assets or part of another undertaking. On Committee Stage I said I would consider this important matter further and I agree this type of acquisition should be notified where the target business exceeds the notification threshold. I am satisfied the new provision addresses the issue.

I welcome the amendment, particularly in the case of assets acquired outside the State because there are turnover implications. It is very worthwhile.

Amendment agreed to.

Amendment No. 23 is consequential on amendment No. 22 and amendment No. 27 is related. The amendments may be discussed together by agreement.

I move amendment No. 22:

In page 18, line 42, after "agreed", to insert "or will occur if a public bid that is made is accepted".

This issue was also raised by Deputy Perry on Committee Stage. I outlined a new provision, section 3(2), to ensure the acquisition of a controlling interest by any means is notifiable within one month. However, I also promised to consider whether a further amendment was needed and this provision removes any ambiguity in regard to the requirement to notify a public bid.

I thank the Tánaiste for taking that issue on board as well.

Amendment agreed to.

I move amendment No. 23:

In page 19, line 13, after "agreement", to insert "or the making of the public bid".

Amendment agreed to.

I move amendment No. 24:

In page 19, line 17, to delete "and".

Amendment agreed to.

I move amendment No. 25:

In page 19, line 18, before "an undertaking" to insert "subject to paragraph (c),”.

Amendment agreed to.

I move amendment No. 26:

In page 19, line 21, to delete "acquisition." and substitute the following:

"acquisition, and

(c) in relation to a merger or acquisition that will occur by reason of the acquisition concerned being an acquisition referred to in section 16(1)(c)

(i) subparagraphs (i) and (iii) of paragraph (a) of subsection (1), in their application to the second-mentioned undertaking in section 16(1)(c), shall apply as if the references in them to the world-wide turnover and turnover in the State were, in relation to that undertaking, references, respectively, to the world-wide turnover and turnover in the State generated from the assets of that undertaking that are the subject of the acquisition mentioned in section 16(1)(c), and

(ii) notwithstanding paragraph (b), that second-mentioned undertaking shall, for the purposes of paragraph (a) or (b) of subsection (1) but not so as to place on it an obligation to notify the Authority of the proposal to put the merger or acquisition into effect, be deemed to be involved in the merger or acquisition.”.

Amendment agreed to.

I move amendment No. 27:

In page 19, to delete lines 22 to 26 and substitute the following:

"(3) If–

(a) 2 or more undertakings agree to a merger or acquisition, or

(b) a merger or acquisition will occur if a public bid that is made is accepted,

being in either case a merger or acquisition to which subsection (1) does not apply, any of the undertakings which have agreed to or are involved in the merger or acquisition may notify the Authority in writing of the proposal to put the merger or acquisition into effect, and provide full details thereof, within 1 month after the conclusion of the agreement or the making of the public bid.”.

Amendment agreed to.

Amendment No. 30 is related to amendment No. 28 and both may be discussed together by agreement.

I move amendment No. 28:

In page 21, line 3, after "effect", to insert "and the Minister has not by order prohibited the merger or acquisition in the public interest".

There was a reasonable discussion on this amendment on Committee Stage. It relates to section 19, which imposes certain limitations on mergers and acquisitions coming into effect. I seek to insert what I described on Committee Stage as a fall-back provision, whereby the Minister could prohibit a merger on public interest grounds which had been cleared by the Competition Authority on competition or economic criteria alone. I chose to raise this particular dimension of the overriding public interest. There are a few other sections in the legislation where similarly it could be raised but this area is suitable.

I do not envisage that the provision would be frequently invoked but it would retain a power for the Minister, notwithstanding the Competition Authority having authorised a merger on competition criteria, whereby she could veto it in the public interest. On Committee Stage I pointed out the only two OECD countries that I could find which did not retain this power in their legislation are Norway and Iceland.

I drew attention to the remarks on Second Stage by the Tánaiste's colleague, Deputy O'Malley, who said that confronted with the choice he would not give away all his powers in this regard. The Competition and Mergers Review Group similarly assumed that the Minister would retain this residual power and recommended accordingly.

I am not persuaded by the arguments the Tánaiste has advanced as to why we could not leave that in the legislation. Provided a decision was transparent and had to be explained and so on, I cannot see why we would not be willing to defend it in the House. The general point has been made about diminution of democratic accountability whereby powers that in simpler times were reposed in the Minister and for which the Minister had to answer in this Chamber have been taken away and allocated to one quango or another. Similarly in this case the powers are allocated, with the exception of the media, to the Competition Authority, which does not take public interest criteria into account. The authority makes these decisions on competition or economic criteria alone.

The public interest does not feature at all and I believe it is not difficult to envisage a circumstance where on economic criteria the Competition Authority would say "Yes, go ahead". However the demands of society and the judgment of the Minister of the day could be otherwise and he or she might want to veto the merger. Nobody is arguing in favour of allowing mergers that could be anti-competitive. The Minister would have residual power to veto a merger in the circumstances I have described.

I am interested in amendments Nos. 28, 30, 33 and 34. In support of Deputy Rabbitte's comments, the necessity for a definition of the "public interest" is very clear. The Title of the legislation makes reference to obligations that arise in regard to our membership of the European Union, related treaties and the public interest. It is best to give a practical example of the way in which amendment No. 28 would work.

If one is talking about competition between media forms as a commodity, one might be able to find grounds in which the products standing alongside each other in a market sense have not been interfered with and it would be possible to remove a distortion from the market. It would not be in the wider public interest, however, for there to be a monopoly in the media.

Amendment No. 28 invites the Minister to retain the residual power of the wider public interest, which would have practical considerations, such as the right of citizens to watch a significant sporting event. Citizens have a right not to be abused by a monopoly in relation to sporting rights and the right to expect the European Broadcasting Union to secure rights to European events. These are beyond the commodity regime and the operation of a company which might own some rights and be in competition with another company bidding for such rights. The rights that arise are rights of citizenship – they exist in the European Convention in the right to communicate. It is in that sense that one uses the wider public interest. It may well be that the Minister might find some rare occasion when a monopoly is threatened that would rob people of diversity of editorial opinion and coverage. One might want to consult the Minister for Arts, Heritage, Gaeltacht and the Islands, or whatever Minister has responsibility for broadcasting, because the broadcasting Minister has to take into account issues beyond the notion of media as a commodity. Having consulted the Minister with responsibility for broadcasting, even as defined by the Minister herself in amendment No. 34, one could then say that Government would consider it was not in the public interest to go ahead.

Amendment No. 30 suggests that when such a consideration has been brought to bear, there would be a statement explaining why it had been invoked, or in the opposite case, the Minister would make a statement to both Houses of the Oireachtas, setting out the reasons in the public interest the merger or acquisition should proceed. That is an important power to retain, not just for the Minister responsible for this area of competition. It recognises that the competition regime is within its furrow but there are wider considerations that make it worth retaining.

The media retains powers, subject to Oireachtas approval. I said last week if someone could give me a good example I might be inclined to keep such a provision, but in 24 years it has not been used and that is the best test. The lack of precedent in this jurisdiction raises the key question whether the public policy criteria should be retained other than in relation to media mergers. In addition, while a large number of OECD countries use public policy criteria as part of their regulatory regimes, there is no such criteria in the EU merger regulations which the Bill mirrors in many respects. This regulation is applicable to largescale mergers which impact across the EU and, in some cases, world-wide. These mergers are decided on pure competition grounds.

There are many examples where ministerial influence on particular decisions has been shifted to independent bodies. We are shifting the power in relation to mergers to the Competition Authority so it will be decided purely on competition grounds. Inquiries under the Companies Acts now go to the Director of Company Law Enforcement. The work permits regime in the new legislation approved by the Government yesterday will go to deciding officers and be dealt with on an independent basis. The important role for Ministers and legislators is to decide the policy but the decisions on the day to day operation of that policy should be made on an independent basis. Due to the exceptional circumstances that exist in media mergers, because of the impact of the media in a democracy and the importance of diversity and plurality of ownership, we are retaining for media mergers only power for the Minister to have the ultimate say subject to the Oireachtas approving.

Given the low profile competition policy has had in this jurisdiction over the years, I am not sure if the fact that this matter did not arise in 24 years is a compelling argument. It is likely there will now be decisions of the Competition Authority in a more rigorous fashion than one ever had before. I cannot see the argument against retaining a residual power in the public interest. No one obliges the Minister to reach for it every time a merger is approved. Why would she be afraid? Ministers made decisions in the planning area, made omissions in competition policy, and other decisions were made in other areas that were improper, unwise or wrong. We live in a democracy, however, and a Minister should be able to stand or fall on his or her ability to defend that position and if the Opposition of the day cannot hold the Minister accountable, it is a pity, but that is the way it is. To divest herself of all powers to the competition authority, except in a narrow area of the media, is unnecessary. I do not have the mergers review group report with me but we adverted to the relevant paragraphs on Committee Stage.

We will regret this. We tend to view this in terms of the politics of the Minister holding the brief but we cannot do it that way. We have to take the risk that, whatever the politics of the Minister, he or she will exercise the power in the public interest and if not he or she will be held to account.

With new technology it is important that the Minister would retain this power. Television pictures can be transmitted even through a telephone line and modem. It is equally important for business that there are not too many restrictions but the media is different because the players are multinational and Ireland is a small entity. There should, however, be competition between companies making acquisitions in a European market and people should be able to enlarge their businesses without restrictions. The same goes for companies coming from Europe into Ireland. That is the free market.

Deputy Higgins is an expert on digital broadcasting and has clearly stated the potential abuses that could take place with dominant players in the market. It is not good enough that the consumer has to take whatever he or she can. The Government is finding it difficult to even find the money for the policy introduced by Deputy Higgins when he was Minister because of the turmoil in broadcasting in this State. Although we are dealing here with totally different circumstances, it is nevertheless important that the Competition Authority has the freedom to make decisions on business quickly. If there is to be an investigation, there should be a timescale. As we have a fast moving economy in which people have money to invest and will not hang around, it is important that we proactively support business. I hope the Competition Authority, once empowered by the Minister, will do this, will receive excellent back-up by public servants and will be accountable to the Minister. People do not want to get lost in red tape and indecision. I fully agree with Deputy Michael D. Higgins' point on this matter.

The Fine Gael Party supports the amendment. It is not wise for the Minister to divest herself of a public interest dimension and it is very important it is retained for the reasons outlined. If the section has not been used for 24 years, it is not likely to be a threatening section, cause the Minister difficulty or give rise to problems in her Department. There are circumstances in which a public interest imperative should be evident and this is one of them.

Nobody has put forward a good public interest reason for retaining this section. I indicated last Friday that I might take another view if somebody gave me a good example of this. Essentially, my argument is that mergers should be decided on competition grounds. Competition is good for consumers and is paramount in my decision on this matter. It changes things much faster than anything else, delivers products and services at better value for money and increases the choice and quality available. For these reasons, competition should be the criterion and the competent authority on competition matters is the Competition Authority.

Amendment put and declared lost.

Amendments Nos. 29 and 31 form a composite proposal and may be discussed together by agreement.

I move amendment No. 29:

In page 21, between lines 5 and 6, to insert the following:

"(c) subject to subsection (4), the period specified in subsection (2) of section 21 has elapsed without the Authority having informed the undertakings which made the notification concerned of the determination (if any) it has made under paragraph (a) or (b) of that subsection (2), or”.

This issue relates to tacit approval of a notified merger after one month where the Competition Authority fails to inform the notifying parties that it either intends carrying out a second phase investigation or that the merger may be put into effect. The point was raised by Deputies Flanagan and Perry on Committee Stage and I promised to ask the parliamentary counsel to advise on the appropriate wording. I am satisfied the amendment addresses what the Deputies proposed.

Amendment agreed to.
Amendment No. 30 not moved.

I move amendment No. 31:

In page 21, between lines 18 and 19, to insert the following:

"(4) Notwithstanding subsection (1)(c), the failure by the Authority to inform the undertakings concerned of the matter referred to in that provision shall not operate to permit the merger or acquisition concerned to be put into effect if the merger or acquisition is not put into effect before the expiry of the period of 13 months after the appropriate date.”.

Amendment agreed to.
Amendment No. 32 not moved.

Amendment No. 35 is consequential on amendment No. 33 and the amendments may discussed together by agreement.

I move amendment No. 33:

In page 25, between lines 6 and 7, to insert the following:

"(5) The Minister shall prohibit a merger or acquisition if the effect thereof is to enable an entity with an interest in more than 20 per cent of a particular media market to obtain an interest in more than 20 per cent of another media market.".

This section relates to media mergers, an issue touched on by the Tánaiste in response to my colleagues, Deputies Michael D. Higgins and Perry. The arguments about why the media ought to be treated differently have been well rehearsed, so I will not go over them again. I understand the Tánaiste accepts the argument that the media is different from other sectors in terms of the maintenance of competition, diversity, plurality of view, independent political coverage, the influence on our politics and democracy and a whole range of other arguments with which we are all familiar and have gone over from time to time.

The difference between us appears to have narrowed to the way in which I am trying to give expression in the Bill to the requirement to insert a threshold beyond which the Minister would prohibit a merger in the media sector. I suggested a figure of 20%. From memory, the Tánaiste's response seemed to be that she does not disagree in principle, but finds it difficult to define the market.

I have tabled another amendment which seeks, perhaps in a crude way, to define "media market". I am happy to signal I will withdraw amendment No. 35 if it impedes discussion of amendment No. 33, which is important. As politicians, we have discussed this issue for many years and sat back as a level of concentration of ownership in this area aggregated to an unhealthy point. The Tánaiste has indicated many times since taking her brief that she would address the question of cross-ownership in the media once legislation on this sector was introduced. Unless she introduces a threshold, she will have failed to do so. The rate of change in this area is dramatic and the prospect of someone acquiring a dominant position, not only in the old media, but also in the new media, is a realistic one.

I do not mind if the threshold differs from mine. The print-audio-television boundary is the one that matters in terms of the political health of society and there may be other areas where the level of the threshold may be less important. I am flexible on this matter and have no difficulty with the Minister regulating or calibrating it as she feels necessary depending on the market in question and other factors.

If the Minister is giving everything else to the Competition Authority and it possesses the expertise and genius she has ascribed to it during the passage of this legislation, why not let it define the media market and advise the Minister on what constitutes a market in particular cases? Without a percentage threshold, however, the measure is toothless and we will remain as inert as ever on the issue.

I am not certain which section of the Bill introduces the concept of substantially lessening competition – I believe it is section 20(2)(a). That seems a very elastic concept – unless there is a significant lessening of competition – and seems very much in the eye of the beholder. One could choose not to see a significant lessening of competition if one were so minded and we would be very much in the old regime. One Minister may see a significant lessening of competition while another may argue that the lessening of competition is not significant at all. It is an elastic concept and the promise the Tánaiste held out – to address the question of concentration of ownership and cross-ownership of the media and its significance for politics and democracy – will not be done unless we take this amendment on board.

I feel strongly about this. Regarding the arguments we have made, one feels more strongly about some than others, but I feel strongly about this, as it goes to the heart of the issue. I will not rhyme off the figures regarding ownership of the media in Ireland. We all know them and different political parties will have different views about them. The British Government published a Bill yesterday on this issue which I have not yet had a chance to read. One cannot ignore the elephant in the room any longer. This is a big issue and needs to be addressed. If the legislation does not contain some percentage threshold, calibrated, variable or otherwise, it is not very meaningful.

Deputy Rabbitte's points are very important. It is in the public interest that there should be diverse media ownership and increased concentration of ownership must be reviewed. For example, the new ADSL technology means that a simple phone line may become a channel for the transmission of data and programme material. Given that currently one company has interests in local and national print media as well as cable and telecommunications, it is critical that we examine any increased consolidation of media mergers in future.

The fact that this is a confined market is the hub of the situation, as Deputy Rabbitte pointed out. Competition is very important and makes for good business but this is a very expensive business to get into. It is one for multibillionaires so there are very few players. I am a great believer in new marketeers and the adage that from small acorns mighty oaks grow, but there are very few acorns that can grow in this area as it is monopolised by big companies with unlimited access to funds.

Communications is the hub of a free democracy and open society. It is important that that continues in the future.

This is a very important amendment and there are two grounds for supporting it.

I have already referred to the concept of citizenship and the fundamental nature of the right to communicate. That right requires diversity in editorial opinion. That is one argument but there are others and if one does not include something like this it makes a mockery of the notion of competition. It does not assist competition to create new monopolies. This is precisely what has happened.

Regarding the invocation to the European competition regime, Commissioner Monti was instructed by the European Parliament to address the issue of concentration of ownership in the media. He did not do so and the European Parliament criticised him for that. Why did the European Parliament come out so heavily in favour of broadcasting and the media generally as being separate from a commodity regime? One after another, speakers in the European Parliament said they wanted people to have the right to tell their own story.

Sticking with the arguments, as this is a competition Bill, if one allows a monopoly to prevail, to which we are very near in relation to some forms of media ownership, as Deputy Perry said it is impossible to have new entrants in the field. For example, of all the films watched in the European Union, no country of the 15 watches less than 93% US films. One cannot get a film circulated or distributed in Europe without taking five other films in a basket, which is a clear abuse of the market relationships when it comes to film. Regarding the exercise of abuse when it comes to new entrants, as Deputy Perry mentioned, there is no successfully commercial film now which spends less than 30% on its marketing budget, which makes it impossible for young filmmakers to enter the field. One can see that, in the name of the new regime, one does not find the State getting out of the way to create a whole series of competitive new entrants but the State getting out of the way so that monopolies can emerge.

For example, the Kirch company bought the rights to the World Cup and the Olympics at one stage, which meant the European Broadcasting Union lost its power and that purchase rights lean on national broadcasters so heavily that it is almost impossible for them to function. One cannot say this is something on which one should stay silent.

The Minister has left the Chamber but she wanted practical examples. The Tory backbench committee in the House of Commons met to discuss media ownership in Britain and came up with a figure of 25%. The Minister could say she will not agree with Deputy Rabbitte's 20% but that she will agree to the Tory figure, 25%. That was their proposal as a result of the concentration of ownership in Britain. Also, how can anyone not address the issue of cross-ownership in a competition Bill? A person can advertise their newspapers through television and push their television programmes in newspapers. Once one starts operating across the fields of different media, one could list a string of possible abuses, particularly as there are no thresholds in each individual media, which is compounded geometrically by the abuses possible when committed in a cross-media way.

One hears people say that it is only a matter of volume in the media and that one should ensure it stays fluid. I cannot see how one can say that there can be open season in relation to this with no upper limits. The Tánaiste asked for practical examples. She should look at the Australian legislation, which is from a right of centre Government. I could name eight or nine countries with right of centre Governments which have found it necessary to operate thresholds. Some have very deep prohibitions on cross-ownership, for many different reasons, but they all amount to the same thing.

In Sweden, a member of the European Union, the managing editor of the second biggest newspaper resigned rather than function as editor when his newspaper was merged with the other leading Swedish newspaper on the basis that he would not be party to the destruction of editorial diversity in Sweden. To say that it is in the public interest in any way to allow a monopoly affects citizens, writers, artists and those who want to enter the field and that is very important. The justification, which I have heard before, is that one is able to draw a distinction between ownership and editorial control, as if ownership does not matter. Every media analyst suggests that this is a myth. In any of the countries in which studies have been carried out, the notion of concentration of ownership leans heavily on whatever media one is discussing.

I can give another example of the domination of the market in relation to television. About 76% of animation products is controlled by a single company and sold into a single television monopoly in Europe, where its distribution is restricted for the rest of Europe. It is a recipe for the destruction of diversity to say that a person can function in television, radio or the print media without an upper limit and that there should be no restrictions on cross-ownership. Not only will citizenship and cultural rights be severely damaged if we do not impose limits, but it would be stupid in competition terms. The industry will become heavy and monopolised and new entrants will be blocked. Young film makers cannot get their films distributed and new entrants to the print media find it difficult as a result of the scale, use and abuse of technology.

Earlier I suggested a limit of 25% on ownership of a single media if we are to be in line with the recommendation of the British Conservative Party. It is proposed that anyone who owns over 25% should not be eligible for other forms of cross-ownership. Deputy Rabbitte is suggesting 20%, but I am sure he would be amenable if the Minister proposed a change to 25%. If this amendment is defeated there will be no limit, which would be massively against the public interest.

I do not disagree with the arguments made by Deputies Higgins, Rabbitte and others. I said last Friday that no section of this Bill was discussed for more time than this one and on Committee Stage I pointed out that it is hard to define the market in this area. I can best explain the Government's policy by citing the example of the Examiner Group, with which we are familiar and which accounts for 16.5% of the market. This figure rises to 17.5% if the UK titles are excluded. There are two evening newspapers in this country, the Evening Echo, which has 21% of the market and is concentrated in Counties Cork, Limerick and Kerry, and the Evening Herald. The Examiner Group's newspapers have 16.5% of an identifiable market and Deputy Rabbitte proposes that this figure should not be allowed to grow to beyond 20%. I wonder if this is realistic, especially as the group's evening title has over 20% of the market.

Having looked at the issue and having taken advice from officials and others, I came to the conclusion that the most effective way to ensure more competition is to examine the matter on a case by case basis. I strongly agree with Deputy Michael Higgins that there is a link between ownership and content, although certain journalists would argue that it is not the case. If we were starting from a greenfield situation and the Irish media did not exist in its current form, perhaps we would do things differently. We have to look at where we are today, however, and ask if it would be anti-competitive and contrary to plurality of ownership and diversity to stop the Examiner Group's Irish markets from growing.

The crux of the issue is the definition of the market. As I said last week, there are daily, weekend, tabloid and provincial markets, so it is hard to define the overall market. Among the newspapers which comprise the evening newspaper market, it could be argued that while the Evening Herald caters for the national market, the Evening Echo is confined to a provincial market in Counties Cork, Kerry and Limerick. It is almost impossible to define the market in legislation. The relevant criteria, in section 23 of this Bill, were adopted from the report of the commission on the newspaper industry, which looked at these matters in the mid-1990s. I wish to emphasise that I considered the matter at great length before deciding to pursue this course of action, in order to achieve the outcomes and aims desired by Deputies Rabbitte, Michael D. Higgins, Flanagan and Perry. While we do not disagree on this matter, the proposal to fix the percentage of a single media which may be owned is not the best means of achieving the competition and diversity we seek in the media, which is an important tool in any democracy.

I am disappointed by the Minister's reply, as I honestly do not think that this section of the Bill will be effective without the insertion of percentage thresholds. The Minister chose to give me an arithmetic reply to indicate why such an insertion would not be feasible, based on the example of the Examiner Group.

I do not deny that it would be feasible.

If she takes on board the fact that I have withdrawn my other amendment, as well as my decision to leave it to the Competition Authority to define whether a market is regional, provincial, national, daily, evening or broadcast, she may agree that she would have the power to act if the Examiner Group decides to do X. If it decides to do Y, however, she may choose to encourage it. I have spent the last couple of days reading Cabinet papers in relation to another controversy which involves the Tánaiste. I am sometimes surprised when matters erupt into the public domain to hear about the arguments that have taken place behind the scenes. I presume that arguments have taken place in relation to this matter at Government level and that the dominant coalition partner decided not to tolerate thresholds. If this is true, the dominant partner has abused its position, a position which I would like to end. It seems that the larger Government partner does not want to address this question for partisan reasons. On the other hand, the Minister, Deputy Harney, promised to address this matter and, without meaning to be mean-spirited, it could be argued that the former leader of her party would have insisted that the question of thresholds be addressed if he were still in that role. The concept of significant lessening of competition will be read by the Minister of the day in the most innocuous way possible and will facilitate a no-action stance.

Is the Deputy replying or is he using his two minutes?

It is a little unfair to ask Deputy Rabbitte to answer that question in a subjective manner.

I will allow my colleague, Deputy Higgins, to have another bite of the cherry.

The only point I have to make in relation to the Minister's observation on this amendment is that she seems to agree with the general principle. I have given many examples, to which I can add that of the Italian Government a few years ago, which examined the empire of Silvio Berlusconi. It decided not only to impose a limit, but to break up Mr. Berlusconi's empire because of his abuse of his position, an abuse that has since resumed. I fail to see how the Minister proposes to implement her agreement with the Dáil. She suggests we have a consensus and I accept that none of us wants a monopoly in the media but how will she bring this measure into effect unless she puts a limit on ownership? In regard to media markets, there is a concentration of ownership and there is a fragmentation of audience. In other words, those who manage to have a monopoly are segmenting the market and then acquiring a dominant position in it. This is certainly happening in relation to specialist television broadcasting. That means one can hardly ever get it back.

I suggest that something else is happening and there is a great fear in Europe about this. If one were trying to introduce a Bill to address diversity not only in Ireland but in Europe, one would be going for upper limits. The business of defining the market is not difficult. I could suggest other ways of doing it. There is one company that controls just about 80% of all the print ink used in a particular week in Ireland. One could then ask who is reading its product. It is not a matter of saying whether a company has 16% or 21%, the issue relates to the prospects of diversity continuing, or being deepened or enhanced. Surely that is what we expect from competition. I have never been conned by that because I have never believed in pure markets. They do not exist nor does perfect competition.

I had an opportunity to closely examine Monti's proposals in Europe. Monti's achievement was in destroying State regulation, standing back and allowing new destructive monopolies in every form of the media to merge in Europe. If one speaks with the association of newspaper editors in Europe, film directors, radio producers, those who work in the area, they will all tell one the same story. People who want to do their intellectual or creative work or write stories from different perspectives are all damaged by a monopoly. There is only one thing that will put manners on it, that is to simply say that if one decides to have a significant section of one media one will not be able to move across to another media and own it.

The other point I did not address is cross-ownership abuse, which occurs right, left and centre. If one wanted to look at the manner in which Murdoch abuses his position – I will not be provocative so late at night about who his friends are – but he advertises using one channel to sell another. The abuses that emerge where there is no threshold are compounded geometrically when cross-ownership is allowed because people can make it impossible for new entrants to emerge.

The Minister made an example of the Examiner Group which owns a considerable amount of the provincial press. Together with local radio and the Independent Radio and Television Commission there is much cross-ownership with the provincial and national press. There are few players here. Most of the provincial press is owned and bought out by one company, even though the Leitrim Observer name will be retained. The position has changed completely. We are a small player in the European context. Deputy Higgins referred to diversity of ownership, free trade and competition which is similar to retail trades. The print business is a privileged business in which to be involved. Its progression during the past five years has been a buy-out and everything that has come on the market has been bought by the same players. That is an indication of the profitability of the business. Some provincial newspapers want a sense of ownership and identity and have a belief in where they come from and refuse to sell.

With the Independent Radio and Television Commission and licences within the State, a huge consortium of which are part of the same message, opposition is good but equally important is that in ten years' time this business would not be controlled by two people in the State. We are talking about the island of Ireland where the marketplace should be distinctly different from anywhere in Europe or the UK. Deputy Rabbitte made the point that it is a good safeguard while the Minister referred to The Examiner. The example of The Examiner does not stand up because she gave examples of Irish Echo and an evening paper in Dublin. The economy of scale does not reflect on the readership throughout the country. I ask the Minister to reconsider this.

Given that we have gone through most of these arguments before, I have not been overly intervening because of the late hour. In case Deputy Rabbitte is in any doubt, the proposal I am following in the Bill is something I signed up for after consulting not only with my officials and following recommendations from the newspaper industry, the review group of mergers but others to whom I have spoken in the area who have much expertise, practitioners, in the field. I wish I could find a way to achieve what we all want to achieve. In case there is any doubt that I am somebody's puppet, I assure Deputy Rabbitte and others that this Bill has been promoted by me and has not been changed by any member of the Government. The Government has signed up to what is in the Bill and nobody has sought to change its proposals. I put that on the record because it is important to do so.

I wish to point out to Deputy Perry that the Examiner Group is a good example because it has 21% of the evening paper market. This amendment provides that it could not grow to more than 20% of the daily market. It has 16.5% of that market at present. If one were to define the market, excluding the UK titles, it has 17.5%. Effectively, what we are saying is that the Irish Examiner Group could not grow to be much bigger because it has 21% of the evening market. That is not in anyone's interest and would not be in the interests of competition in this sector.

It appears strange that we are arguing the Minister should retain this residual power in the public interest from time to time, although it has not been used for the past 24 years. When we say we are introducing particular criteria in respect of media mergers because of the special position the media has in a democracy – one of the hallmarks of a democracy is a free press – we are adopting exceptional criteria that goes way beyond economic matters and strict competition criteria and are leaving a residual power with the Minister that is subject to parliamentary scrutiny and parliamentary approval. In some sense that is not good enough. If we were starting from a greenfield site perhaps we could start with something like this. If there was real competition in this economy historically, we might not be in this situation. Competition law here is only ten years old and enforcement powers are only five years old. Competition is in its infancy in Ireland. Unlike the United States, competition in Ireland has, unfortunately, been all too slowly embraced in many respects. However, we are where we are. I accept that the link between ownership and content is very strong. The most appropriate way to proceed is to look at each proposed merger on a case by case basis to see what impact it would have on the criteria laid down in section 23.

For all of those reasons I do not believe this amendment could or would achieve what Deputies Rabbitte and Higgins set out to achieve.

I did not say the Tánaiste was anybody's puppet. I said I suspected she was stalled—

Deputy Rabbitte is wrong.

The Tánaiste has told me I am wrong and I accept that. She claims paternity of this proposal and that is all right by me. However, I believe she is wrong. I can understand why the dominant partner in Government would do this. They are doing quite well out of the status quo. This section will be ineffectual without some threshold.

We have been talking about the Irish Examiner and the Evening Echo but it would be more relevant for the future to talk about the convergence of technologies that is going to provide a new medium which will, more and more, be the reality. The Tánaiste recently approved the Eircom acquisition and issued a public statement saying that Dr. O'Reilly had given certain undertakings. He was not required to but he did.

Secret undertakings.

I still do not know what the undertakings are. They were given behind closed doors and, to my knowledge, have not been published. I do not know if they are worth anything. That is the track record and it seems to me that this is more relevant than the question of whether the Evening Echo has a regional or national market.

If the Tánaiste finds the Competition Authority so praiseworthy and reposes so much confidence in it and if it is now, however belatedly, adequately staffed, why not let the authority tussle with the definition of market, the issue which divides the House? The Tánaiste appears to say that she agrees with Deputies Higgins, Perry and myself, if only she could define the market. I refuse to accept that one cannot define the market. I think it is possible to define it.

We all live in the real world of politics. I know this is a big issue in Irish society. I have been subjected to representations on it. One is entitled to make and receive representations in our society and I am not complaining about that. This is a big decision. The Tánaiste is being carefully watched and her decision is a disappointment. We will not get a second bite of this cherry in the near future. A significant lessening of competition will facilitate further aggregation and when we return to this issue in the future it will be too late to address the issue of cross-ownership.

I am not persuaded by the Tánaiste's arguments. I believe it is possible to define a market. It would be possible to give the authority the task of advising the Minister, leaving the Minister the residual power to act when and if she thinks it appropriate to do so.

Amendment put and declared lost.

Amendments Nos. 34 and 36 are related and may be discussed together, by agreement.

I move amendment No. 34:

In page 25, to delete lines 38 to 40 and substitute the following:

"‘broadcasting service' means a service which comprises a compilation of programme material of any description and which is transmitted or relayed by means of wireless telegraphy, a cable system or a multipoint microwave distribution system, a satellite device or any other transmission system, directly or indirectly for reception by the general public, whether that material is actually received or not, and includes a sound broadcasting service within the meaning of the Radio and Television Act, 1988, but does not include any such service (whether involving audio-visual material or audio material) that is provided by means of the system commonly known a the Internet;".

In response to concerns expressed on Committee Stage in the Seanad and the Dáil as to the coverage of all forms of media under the Bill, I undertook to reconsider the definition in the Bill. In particular it was represented to me that technology such as digital subscriber lines was not covered by the definition. My intention always was to cover all media sectors. I am not concerned with the technology so much as the content.

I have reconsidered the definition in subsection (12), taken out the reference to licensing and added:

"or any other transmission system, directly or indirectly for reception by the general public, whether that material is actually received or not, and includes a sound broadcasting service within the meaning of the Radio and Television Act, 1988, but does not include any such service (whether involving audio-visual material or audio material) that is provided by means of the system commonly known a the Internet".

Subsection (13) has been deleted completely. The omission of any references to statutes under which transmission or retransmission is licensed means that the definition in the Bill is not dependent on changes in other legislation.

The amendment means there is a consequent amendment to the definition of broadcasting service. This definition was taken from the Broadcasting Act, 2001. The definition is now fully quoted in the section, with the addition of the phrase, "or any other transmission system".

The result of these amendments is that the section now covers any technology whereby television or radio is transmitted or retransmitted.

The reference in the Bill as passed in Committee was to the Broadcasting Act, 2001 and the radio legislation of 1988. The Minister has dropped the reference to the Broadcasting Act and she now offers a new definition.

The amendment defines a broadcasting service as "a compilation of programme material". I do not understand this use of the word, "compilation". Are we speaking about direct broadcasting or something that has been edited?

The amendment refers to material which has been transmitted "for reception by the general public". What is the necessity for the word "general"? The phrase, "for reception by the public" arises in other legislation which relates to broadcasting, and with which I am familiar, where it has a very different meaning.

The most significant innovation in the amendment is the exclusion of the Internet. Does this have the effect of putting Internet broadcasters into a special category, excluded by the Bill as amended by the Minister's latest amendment?

Amendment No. 36 substitutes the words "of programme material by means of wireless telegraphy, a cable system or a multipoint microwave distribution system, a satellite device or any other transmission system". This amendment omits the reference to the Internet.

Are we talking about the technical act of broadcasting or programme making? The use of the words "general public" might allow a person to present a defence by saying a broadcast programme was not directed in general but for specific needs. I am curious about the reference to the Internet. Finally, the reference to a compilation of programme material has a connotation of material which has been edited and finished.

In relation to the definition, I understand it was taken from the Broadcasting Act, 2001. The Internet is excluded because one cannot, as we know, control it. There is open access to—

I am not seeking to control it in that sense. I am referring to the words "does not include any such service (whether involving audio-visual material or audio material) that is provided by means of the system commonly known as the Internet". We are not talking about the Internet as a means of communication but about the use of the Internet as a broadcaster. We are talking about, for example, the retransmission of audio visual material. This raises immense questions and I afraid I am not defeated by the fact it is the definition in the Broadcasting Act, 2001. I made the same arguments then. The issue is that it does "not include any such service (whether involving audio-visual material or audio material) provided by means of the system commonly known as the Internet". No one is talking about the control of the act of communication that it is. It is about whether one envisages the Internet as a broadcaster. The other point I mentioned was about reception by the general public. That definition in the Broadcasting Act had a function because that Act accepted the obligation to broadcast to the public. What about specialist broadcasting aimed at a section of the public?

I am told that for legal consistency, we are going with the definition in the Broadcasting Act and that we are not talking about anything that is relayed to specialist or particular groups but about what is transmitted generally. Therefore, the words "general public" are used for legal reasons. I am afraid I am not up to speed on the points the Deputy raised and I apologise for that.

The flaw is in the legislation of the Minister's colleague.

Amendment agreed to.
Amendment No. 35 not moved.

I move amendment No. 36:

In page 26, lines 38 to 44, to delete all words from and including ", pursuant" in line 38, down to and including "1988" in line 44 and substitute "of programme material by means of wireless telegraphy, a cable system or a multi point microwave distribution system, a satellite device or any other transmission system".

Amendment agreed to.

I move amendment No. 37:

In page 27, between lines 15 and 16, to insert the following:

"(4) Such an appeal may be made by–

(a) any trade or professional association whose members are affected

by the Authority's decision, or

(b) an association of consumers on behalf of its members.”.

This amendment was rejected on Committee Stage but I have narrowed it considerably on the basis that on the last occasion, I was anxious that there would be a right of appeal for any aggrieved party. I accepted on reflection that it was particularly broad, so I have confined it to any professional association or consumer group or association. It is important, in the context of the powers we are conferring on the competition authority in relation to mergers, that there would be a right of appeal. In the legislation, as drafted, no rights of appeal have been conferred on competitors, consumers or on anybody other than the parties directly involved. I think that is a difficulty, particularly in areas where, for example, the authority from time to time might rubber-stamp a merger without having given it appropriate and sufficiently careful consideration. If either of the parties directly involved do not go to the High Court, nobody can. As I said, I have narrowed the amendment considerably since the last occasion in the hope that it might meet the Tánaiste's wishes or meet with her approval.

Section 24 should be seen in the wider context of the transfer of the merger responsibilities to the authority which is one of the main new features of the Bill. Had we not provided for the appeal in section 24, there would have been legitimate grounds for concern by enterprises in relation to the transfer of the merger responsibility to the authority. The purpose of the appeal provision in section 24 is to ensure that firms which are aggrieved by negative decisions of the authority in merger cases can have recourse to the courts. The section is constructed on that basis. Negative decisions are unlikely to be the source of grievances or complaints by persons other than the undertakings directly involved. The views of interested third parties, such as trade associations or associations of consumers, can be received and considered by the au thority when it is examining the merger in the first instance. This is sufficient provision and protection for the interests concerned.

I welcome the fact that associations will get the opportunity to express their views. RGDATA and the Vintners' Federation are important organisations and I hope the Tánaiste realises that.

I refer to subsection (8) which states that the authority shall inform the Minister of the opinion it has so formed on request being made by the Minister of it to do so. If one reads that in conjunction with subsection (7), does it mean that the Minister of the day may not bother to ask the authority? There is not much point in the authority forming an opinion if the Minister does not get it. I am not sure how subsection (8) intermeshes with subsection (7).

If the Minister does not request the authority, it does not have to inform.

The implication in subsection (7) is that this gives the authority the power to form an opinion about how the application of the special media criteria should affect the exercise of the Minister's power. I am not sure what the point is if the Minister of the day can ignore it, choose not to request it and, therefore, does not receive it.

I am advised that what is involved here is that the Minister does not have to request the views of the authority on non-competition issues – in other words, they are solely a matter for the Minister.

As it is now 11 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Tánaiste and Minister for Enterprise, Trade and Employment and not disposed of are hereby made to the Bill, Fourth Stage is hereby completed and the Bill is hereby passed."

Question put and agreed to.

The Bill, which was considered by virtue of Article 20.2.2º of the Constitution as a Bill initiated in Dáil Éireann, will now be sent to the Seanad.

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