This meeting has been called to consider an order pursuant to section 18(7) of the Competition Act 2002 referred to the joint committee by Dáil Éireann and Seanad Éireann. I welcome the Minister for Enterprise, Trade and Employment, Deputy Martin, and his officials to the meeting. I invite the Minister to make his statement on the order.
Competition Act 2002: Motion.
The purpose of this media merger order is to refine the class of media mergers which must be notified to the Competition Authority and to the Minister. It will also revoke the current media merger regulation which is in operation since 1 January 2003.
Application of the current order has led to all mergers proposed by undertakings which carry on a media business in the State being subject to approval, regardless of the fact that the proposed merger may have no media implications or in any way impact on media or other activity in Ireland. For example, if an undertaking with diverse global activity, including a broadcasting subsidiary which transmits into Ireland, wants to acquire a sausage factory in Mexico, that undertaking is required to notify such acquisition to the authority. The authority must examine the acquisition from a competition perspective while the Minister must apply public good criteria to the proposed acquisition.
Rather than specifying a single, all-encompassing class of merger that comprises each and every media merger, as is the current position, this new order specifies two particular classes of media merger. From 1 May 2007, I intend that only those media mergers in which two or more of the undertakings involved carry on a media business in the State, and those media mergers in which one or more of the undertakings involved carries on a media business in the State and one or more carries on a media business elsewhere, would be notifiable to the authority and the Minister as media merger applications.
Section 18(7) of the 2002 Act requires that a resolution confirming the order be passed by each House of the Oireachtas, otherwise the order will lapse. The purpose of this order is to eliminate unnecessary notifications while still allowing the authority and the Minister to deal with those matters which are legitimately within the scope of the media merger provisions. Not alone will it release the authority, the Minister and Department staff to engage in more meaningful work, but the removal of the unnecessary administrative burden from non-media mergers will improve the corporate image of Ireland Inc. This is in line with the Government's policy to reduce unnecessary red tape for business.
We have made an assessment of the number of mergers notified to me by the Competition Authority in the past three years. This shows how many of these were considered media mergers and, of those, how many involved the acquisition of non-media targets. In 2003, of 47 merger notifications, eight were non-media. The non-media figure in 2004 was four, in 2005 it was seven and in 2006 the figure was nine. Some clearly unnecessary stuff comes onto the desk.
The Minister said it has no purpose other than that outlined. Is there any recent or imminent merger which requires this motion?
No. It is cumulative. We in the Department looked for a way of streamlining this procedure and avoiding unnecessary activity. To my knowledge, it does not affect anything.
I second the motion, which is quite clear-cut. It is designed to tidy the legislation. Do local radio mergers come within its ambit? The concept of local radio is to provide an independent service for people in a local area.
We are dealing only with the order.
My concern is that local radio is being taken over by major multinational and national companies, which are taking away from its whole purpose.
They will still be notifiable to the Competition Authority.
I have no problem with this. It is a sensible idea to tidy it up. I refer to the criteria in section 23. Does it not also have to take into consideration the conditions of the licence issued? Would it not have to copperfasten and reinforce the conditions imposed by the licence awarding body? I refer here to local radio.
Regarding Senator Leyden's comments, the Competition Authority has to make sure there is competition and it will define the market area.
The quality of the broadcast——
That is a matter for the Broadcasting Commission of Ireland.
That is fine.
I am sure the Minister's proposal makes eminent sense. In case anyone would think there is a conflict of interest, I should state that I am a minor shareholder in Radio Kerry.
Does that extend to Shannonside?
That explains the robust questions I am asked when I go there.
I wrote the editorial independence policy.
I thank the Minister and his officials for attending. That concludes our consideration of the order regarding the Competition Act 2002.