I move amendment No. 4:
In page 4, to delete lines 34 to 49 and in page 5, to delete lines 1 to 32 and substitute the following:
15B.—(1) Subject to the provisions of this section, all arrangements, decisions, and practices, by grocery undertakings, which have as their object or effect, the prevention, restriction or distortion of competition in trade in grocery goods, in the State or any part of the State, shall be prohibited, including in particular, without prejudice to the generality of this subsection, those which—
(a) directly or indirectly attempt to compel or coerce another grocery goods undertaking, whether by threat, promise or any means, to resell or advertise for resale any grocery goods at—
(i) a price fixed directly or indirectly by the first mentioned grocery goods undertaking, or
(ii) a price above a minimum price fixed directly or indirectly by the first mentioned grocery goods undertaking,
(b) apply dissimilar conditions to equivalent transactions with any other grocery goods undertaking,
(c) directly or indirectly compel or coerce, whether by threat, promise or any means, any grocery undertaking to make a payment or grant any allowance for the advertising or the display of grocery goods, or
(d) directly or indirectly compel or coerce, whether by threat, promise or other means, another grocery undertaking to make any payment or grant any allowance to a retailer in respect of the provision of space for the display marketing or sale of grocery goods within a retail outlet.
(2) Following the commencement of this Act and without prejudice to the generality of subsection (1), the Minister may make such regulations as may be appropriate to prescribe any additional arrangements, decisions or practices that are contrary to section 15B(1) or to provide for any related aspect required for the effective enforcement of this section 15B(1).
(3) Nothing is this subsection shall affect any right of the Authority to bring proceedings for an offence under section 6 of this, or of any other person to issue proceedings under section 14 of this Act.
As currently worded, the section purports to prohibit a number of specific activities which were formally outlawed by the groceries order. It purports to prohibit certain activities when carried out by a grocery undertaking, including resale price maintenance, hello money, the imposition of unfair contract terms and the compelling of people to pay for advertising allowances. The changes are being introduced by the Minister because of fears that such activities, while prohibited by the groceries order of 1987, might not be prohibited by the Competition Act 2002, where carried out by a non-dominant undertaking.
The amendment proposed by the Minister has been criticised as it makes no provision for other anti-competitive activity formally prohibited by the groceries order but which will not be prohibited when carried out by a non-dominant undertaking, such as persistent targeting of a competitor by a larger but non-dominant retailer through a range of tactics including loss leading, below-cost selling and predatory pricing. There seems to be an inconsistency in prohibiting certain types of anti-competitive behaviour by non-dominant undertakings while tacitly ignoring others. Legal opinion which has been brought to my attention confirms that the unilateral pricing practices of non-dominant undertakings will not otherwise amount to a breach of current European or Irish competition law.
The second criticism of the change proposed by the Minister is that the provisions are nullified by section 15B(5), to which reference was made in the context of Deputy Howlin's amendment No. 3. Section 15B(5) causes difficulty because it seems to nullify what the Minister is attempting to achieve in the other sections. Section 15B(5) states that the four practices outlined are only prohibited when they constitute conduct that prevents, restricts or distorts competition in the State or any part of the State. The caveat which is introduced effectively renders the earlier protections afforded by the Bill worthless, and considerable expense and detailed economic analysis will be necessary before they can be effectively invoked.
If somebody was to take a case under that section, it would cost an enormous amount of money to build up the case. That is not in the spirit of what the Minister is attempting to achieve. The Minister has inserted section 15B(5) on the basis that language is replicated from the Competition Act 2002. That is not entirely correct. The wording used in section 15B(5) is used to describe the generality of anti-competitve behaviour before listing some specific examples of such behaviour without prejudice to the generality. That is my legal advice which I present before the select committee.
In this case, the wording is used to the opposite effect, to restrict the application of the specific instances of anti-competitive behaviour. It is a perverse distortion of the provisions of the Competition Act 2002 to claim that section 15B(5) replicates the language of the 2002 Act. This is not done.
It is also suggested that to properly replicate the provisions of the Act, section 15B should be entirely recast in a similar manner to section 4 of the 2002 Act. This would ensure that all anti-competitive behaviour is prohibited and that some specific examples of such behaviour can be instanced. The provision would also ensure that additional anti-competitive practices could be listed in the Bill or subsequently by the Minister via statutory instrument. I am informed that EU law specifically recognises that member states may enact stricter laws than the EU competition measures that prohibit acts of unfair trading practice, be they unilateral or contractual. This means the Minister could strengthen and re-cast this section of the Bill without interfering with EU precedents or contravening EU law.
Section 15B(5), as a result of enormous cost and analysis that would be required to take a case, effectively forces a small player in a market, in taking on a larger player, to expend much money. Therefore, such players would be risking themselves, their families and their business in taking on a big multiple and dealing with issues of retail price maintenance, hello money, display space and various other advantageous allowances which may be happening in the marketplace. If these issues were to be contested through the courts, it would cost a considerable amount of money to achieve a favourable outcome, under section 15B(5). The Minister should reflect on this.