I move: "That the Bill be now read a Second Time."
It is accepted by most representatives in the House that the transformation of this country's economy from an inward-looking, State-dominated economic model to one of export-oriented growth, dynamic competition and increased choice for our citizens has resulted in unimaginable societal and economic progress for the State and its people over the past 30 years or so. Much of this progress arose from policy decisions made and voted on by the Oireachtas, driven by the desire of previous Members of this House to end the relentless emigration of our people and pursue the idea that this nation's living standards could be as good, if not better, than those of our European neighbours.
As a country, we have surpassed even those goals, not by accident, but by the decisive and deliberate efforts of Governments to ensure that Ireland continues to have a competitive economy, not for its own purpose, but to fund a fair and inclusive society with high levels of educational attainment, good-quality employment and social supports for our citizens. The advance of our integration into the EU's Internal Market has not only created record levels of employment, but has also benefited our citizens in the choice of goods and services that they can access in Ireland for competitive prices.
We are all aware, however, that there are sections of our economy that are less competitive than others and, in some instances, have conspired to keep it that way. We are all far too aware of sectors that still have high costs associated with the services they provide, resulting in high profits but underwhelming services. We know practices that drive out competition, drive up costs for ordinary citizens and undermine the dynamic nature of our economy. This is why I am particularly determined to introduce this Bill to the House for Members' consideration. I hope that this legislation will go a long way in deliberately disrupting firms and companies that do not play fair, try to drive out competition and seek to rig the system to increase profits in an unfair manner.
The purpose of the Bill is to introduce measures that will strengthen the powers of our national competition authorities and give them greater tools to tackle anti-competitive practices. For too long, this State has been seen as soft on rogue businesses and those seeking to game the system. This view, regardless of whether it is justified, does significant damage to Ireland's credibility as a place to do business and undermines our people's confidence in government and Government agencies. We see continued frustration with the high cost of insurance, which is driving many small enterprises and community groups out of business. When that occurs, the impact on local employment and creativity can be profound. I share that frustration. Despite some of the most significant reforms to the law pertaining to competition, consumer rights and personal injuries in recent years, premiums have not dropped sufficiently and uniformly despite assurances made by the insurance sector. It is fair to say that the outcome of the recent investigation by the Competition and Consumer Protection Commission, CCPC, into the motor insurance market leaves questions unanswered. It also shows the need for legislation, which I am introducing today.
Let me be clear that this Government wants to see severe consequences for companies that engage in price fixing, bid rigging or any other form of anti-competitive practice that does damage to our economy and our people.
We believe unlawful actions by companies should have strict and severe consequences. Penalties are needed for unlawful actions. This is the reason for the introduction of this Bill. We are seeking to give teeth to our agencies charged with protecting consumers and our economy. We need to resource these agencies properly and give them the powers required through legislation to carry out their tasks effectively and efficiently.
As Members of the House will know, Ireland has two national administrative competition authorities: the Competition and Consumer Protection Commission, CCPC, and the Commission for Communications Regulation, ComReg. This Bill will transpose the ECN+ directive, which means that for the first time in Ireland, competition law can be enforced through administrative actions taken by competition authorities. ECN stands for the European Competition Network, which is composed of the Commission along with national competition authorities from each member state. It became apparent to the network that there are several areas in which existing EU law is insufficient to meet the objective of a fair internal market for everyone. These include, but are not limited to, giving national competition authorities the means to impose effective fines and implement leniency programmes. The ECN+ directive intends to fill some gaps in the current system.
The new powers given by the ECN+ directive will apply only where there is an interstate trade element. In deciding to implement this directive through primary legislation, the Irish Government felt it was important that the same sanctions should apply to breaches of national competition law. This will avoid having two parallel systems with differing sanctions.
The stated aims of the ECN+ directive are to ensure all national competition authorities have effective investigation and decision-making tools, to ensure all national competition authorities have the ability to impose effective deterrent fines, to ensure all national competition authorities have a well-designed leniency programme in place that facilitates applying for leniency in multiple jurisdictions, and to ensure all national competition authorities have sufficient resources and can enforce EU competition laws independently.
The date given by the Commission for the transposition of this directive was 4 February 2021. Unfortunately, Ireland, along with several other member states, did not manage to transpose it by the deadline. I do not need to tell Members how incredibly difficult the past two years have been and about the significant legislative burden the pandemic placed on both Houses of the Oireachtas. This is a difficulty we share with our European counterparts. Particular to the Irish context, however, was our unique constitutional position. Transposing the ECN+ directive raised significant constitutional considerations given the particular role of the courts in the Irish Constitution. The constitutional concerns included the introduction of the concept of administrative sanctions, periodic penalty payments, interim measures and leniency provisions. Ireland has robust defences against the administration of justice by any body save for the Judiciary. To transpose the directive in a way that was compatible with Irish law, it was necessary to consult several legal experts to ensure the legislation would be workable.
Additionally, in April 2021 the Supreme Court issued a majority judgment in the case of Zalewski v. the Workplace Relations Commission, WRC, and others that had a significant impact on the drafting of the Bill, which was quite advanced at that stage. A previous decision of the High Court had concluded that the WRC was not administering justice within the meaning of Article 34 of the Constitution. The judgment in the Zalewski case overturned this decision. The Supreme Court agreed that the adjudication service of the WRC does constitute the administration of justice, which has traditionally been regarded as the exclusive preserve of the courts. However, the majority decision also concluded that the adjudication service of the WRC is not repugnant to the Constitution because it found that the administration of justice is limited. Limited administration of justice is permissible under Article 37 of the Constitution. While the Zalewski judgment was supremely helpful in clarifying how the administration of justice can be achieved within the parameters of the Constitution, it required in the case of the Bill a fundamental redesign of how the provisions relating to administrative sanctions would work, at quite a late stage in the initial drafting.
The main changes introduced on foot of the Zalewski judgment concern ensuring the adjudication officers are independent in their functions, the processes of adjudication and investigation are separate and distinct, and the procedures surrounding the imposition of administrative financial sanctions are clear and transparent. The Bill also provides for court confirmation of the decisions of adjudication officers and the ability to appeal those decisions. The delay in bringing this Bill to the House is regretted, but it is imperative to transpose the directive in a way that is constitutionally solid and provides our competition authorities with the tools they need to challenge anti-competitive conduct effectively.
It has long been a commitment of the Government to crack down on white-collar crime. As part of making good on this commitment, a cross-government agency review group, chaired by Mr. James Hamilton, was put together. The group comprised representatives of Departments and the key State agencies charged with the prevention, investigation and prosecution of economic crime and corruption. One of the recommendations made by the Hamilton review group was to amend Irish competition law to create a specific offence of bid-rigging. This proposal has significance concerning public procurement fraud. Express provision for bid-rigging is included in this Bill and meets this recommendation.
The Joint Committee on Enterprise, Trade and Employment had hearings on the general scheme of the proposed legislation in February 2021. Its report contained 17 recommendations for consideration in the drafting of the Bill we are considering. In drafting the Bill, we addressed all of these recommendations, including by ensuring there would be no difference between the roles of CCPC and ComReg as competition authorities, as the powers required for the transposition of the directive are given to both as "competent authorities" throughout the Bill.
I have mentioned that there has been careful consideration of the legal issues, including in respect of how this legislation would interact with the Irish Constitution and the implications of the Zalewski ruling on the measures in the Bill. In the main, the enforcement powers in the Bill relating to both administrative and financial sanctions, in addition to other sanctions, such as structural or behavioural remedies, are identical in regard to both EU and domestic law as they are subject to court confirmation. However, we have separate provisions for periodic penalty payments in order to fulfil the specific requirement of Article 16 of the directive, on the one hand, and the constitutional requirements for domestic law, on the other, which is the only instance where differentiation between national administrative competent authorities and national judicial competent authorities is relevant within the Bill. The proposed maximum penalties for infringements of competition law are also the same regardless of whether EU or domestic law has been infringed. Rights to appeal have been dealt with in Part 2H of the Bill.
The inclusion of bid-rigging as a specific offence means the competition authorities can pursue cartels specifically involved in this activity in the future. The Minister for Justice has established an action plan to ensure cross-government implementation of the recommendations of the Hamilton report, including in respect of the recommendation of screen e-tenders data, with my Department and the CCPC both actively engaging in that process. My Department worked with the Department of Justice on the proposals on surveillance and interception to ensure alignment with existing legislation and procedures. As a result of the ongoing review of the interception legislation by the Department of Justice, it has been decided to include the CCPC within the remit of that project instead rather than through this Bill.
Both my Department and the Department of the Environment, Climate and Communications are committed to ensuring sufficient resources for the CCPC and ComReg to implement this legislation, which includes some additional resources for the CCPC having already been put in place, but both Departments will keep their needs under review as the legislation is concluded and implemented.
I turn now to the main provisions of the Bill. Part 1 of the Bill contains a number of standard provisions concerning the Short Title, commencement, transitional provisions. In addition, section 2 defines a range of terms used in the Bill. Part 2 deals with a number of amendments to the Competition Act 2002, which is referred to throughout the Bill as the Principal Act. Section 5 amends the Principal Act to insert a definition for bid-rigging, as mentioned earlier in the context of the Hamilton Review Group. Sections 6 and 7 amend the Principal Act, setting out that in order for an act to be an offence, it must intentionally or recklessly prevent, restrict or distort competition. They are no longer offences of strict liability. Section 9 provides for an increase in the maximum fines that can be imposed for concerted practice and cartel offences. Section 12 is an extensive section that inserts a number of new parts into the Principal Act, parts 2C to 2H, which will insert 51 new sections. Part 2C relates to how certain investigations are conducted. Part 2D relates to adjudication officers and matters related to, inter alia, their appointment, independence and functions. This part also sets out the powers of adjudication officers to impose administrative financial sanctions. Part 2E sets out the leniency programme for the administrative sanctions regime under this Bill. Leniency includes immunity in this instance. Part 2F relates to mutual co-operation and how competition authorities across the member states will work together regarding the enforcement of competition law. Part 2H relates to the procedural provisions around the gathering and use of information and evidence. Part 3 deals primarily with refining the provisions in the Principal Act surrounding mergers and acquisitions, and strengthening the powers of competition authorities to deal with those that may have an adverse effect on competition. Section 13 allows undertakings to voluntarily inform the CCPC of a below threshold merger and empowers the CCPC to take interim measures where appropriate. Section 15 allows for the voiding of any merger or acquisition that requires a decision of the CCPC but is put into effect prior to that decision being made, or where requirements instigated by the CCPC were not complied with. It also sets out penalties to be imposed for this. Part 4 deals with amendments to the Competition and Consumer Protection Act 2014. Section 25 relates to the independence of adjudication officers. Section 28 deals with the chairperson or member of the CCPC appearing before an Oireachtas Committee. Section 29 expands the provisions of legal privilege to proceedings involving adjudication officers. Section 31 sets out greater powers to enter premises and seize, retain and examine records by an authorised officer of a competition authority during an investigation. Part 5 is composed of one section, section 33, which amends the Criminal Justice (Surveillance) Act 2009 to allow the CCPC to exercise surveillance functions. Part 6 relates to amendments to the Communications Regulation Act 2002 and expands the powers of ComReg to enable it to deal more effectively with breaches of competition law. Section 35 sets out greater powers to enter premises and seize, retain and examine records by an authorised officer of a competition authority during an investigation, in the same way as the powers of the CCPC are expanded in section 31. Part 7 is composed of one section which allows for the insertion of a number of references to various statutory instruments and regulations into Schedule 9 of the Consumer Protection Act 2007.
I would like to take this opportunity to flag that it is my intention to bring a small number of amendment to this Bill on Committee or Report Stage to clarify the intentions of certain aspects of the procedures to be adopted under this Bill, and also to ensure that the powers of both the CCPC and ComReg are sufficient for the additional functions which they will have as a result of this Bill. On Committee Stage, I also propose to introduce an amendment to section 12 of the National Standards Authority of Ireland Act 1996. The proposed amendment will be purely technical in nature and will not make any changes in substance to the National Standards Authority of Ireland Act 1996. The purpose of the proposed amendment will be to modernise and provide more transparency in the wording of section 12, which governs the power of the National Standards Authority of Ireland, NSAI, to charge fees for carrying out its services, activities and functions and selling its products. The NSAI is a State agency under the aegis of the Department of Enterprise, Trade and Employment. Its functions are set out in sections 7 and 8 of the 1996 Act, and relate primarily to standardisation, certification and metrology. Government will be asked to agree to the various amendments.
In conclusion, this Bill is weighty legislation which required much consideration and redrafting to get right, particularly in light of the Zalewski judgment. However, I am confident that the Bill before the House is robust and will allow Ireland to deal effectively with anti-competitive behaviour on both a national and European level in a way that is wholly in accordance with our Constitution. Anti-competitive practices affect everyone, making it more difficult for honest businesses to prosper and having adverse effects on consumers. By strengthening the powers of our competition authorities, we take an important step to ensure that our economy is open, fair and transparent. I commend the Bill to the House.