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Select Committee on Jobs, Enterprise and Innovation debate -
Thursday, 15 May 2014

Competition and Consumer Protection Bill 2014: Committee Stage

The Competition and Consumer Protection Bill 2014 was referred to the select committee by an order of the Dáil on 16 April 2014. I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and his officials, some of whom came before the committee last week. I thank them for their efforts on briefing the committee.

I ask all committee members to switch off their phones or switch them to flight mode because they affect the recordings.

It is intended to conclude Committee Stage today if at all possible. I must stress the Minister needs to leave at 3.40 p.m. to attend another meeting at 4 p.m. We have a good track record of dealing with Bills in a professional business-like manner but I accept the Bill is long and complicated.

Section 1 agreed to.
SECTION 2

I move amendment No. 1:

In page 8, line 6, to delete "section 33" and substitute "section 34".

This is a technical amendment to insert the correct reference to the definition of authorised officers in the interpretation section.

Amendment agreed to.
Section 2, as amended, agreed to.
SECTION 3

I move amendment No. 2:

In page 8, between lines 34 and 35, to insert the following:

"(3) The Minister shall make provision under this section whereby it shall not be a breach of this Act (or any statutory instrument relating to competition law), for the State to negotiate fees in relation to professional contracts for services from members of professional bodies, and a list of such services and bodies shall be set out by the Minister under this section.".

This amendment relates to ongoing issues with various professional organisations. Citing the Competition Act, the Competition Authority has stated that, when negotiating with Departments, the organisations cannot represent the interests of their members, particularly in respect of pay and conditions. That those who seek to represent the rights of members entering into contracts with the State would be prohibited under competition law from doing so seems to be an unintentional anomaly. I suggest that this amendment might be a way around that anomaly. I am conscious that court proceedings relating to this matter are under way.

Regrettably, I am not in a position to accept this amendment. Under EU and Irish competition legislation, self-employed persons, including professionals who are not employees, are regarded as undertakings. There is ample evidence of EU case law in the European Court of Justice, which has determined that professionals are regarded as undertakings from an EU competition law angle.

Section 4 of the Competition Act 2002 prohibits and makes void all agreements between undertakings, decisions by bodies representing undertakings and concerted practices that have as their object or effect the prevention, restriction or distortion of competition in trade in any good or service in the State or any part thereof. This reflects the provisions of Article 101 of the treaty on the EU, previously EC treaty Article 81, which contains a similar prohibition on agreements, decisions and concerted practices that may affect trade between member states. Currently, representative bodies cannot decide on the fees paid for services provided by their members. Nor can their members agree a price between themselves for their services, as this is regarded as price fixing contrary to the 2002 Act. However, the State is not prohibited from unilaterally setting a fee that it is willing to pay for such services. Neither is it prohibited from consulting a representative body and its members as long as the State retains the power to set the price. Thus, any exemption in respect of professionals providing services to the State would have an impact on Exchequer finances. More generally, any subjugation of competition law is more than likely to result in higher prices for businesses and, ultimately, consumers, a loss of competitiveness for business and, as regards the State and taxpayers, higher costs.

As the Deputy acknowledged, a High Court case between the Competition Authority and the Irish Medical Organisation, IMO, is pending and I would not like to prejudice the court proceedings.

Regarding an exemption for certain categories of workers from competition law, the EU-IMF programme for financial support for Ireland committed the Government to ensuring that no further exemptions to the competition law framework would be granted unless they were entirely consistent with the goals of the programme and the needs of the economy and were agreed in advance by the troika. No such exemptions were agreed in that context. There are no plans to introduce such exemptions, especially in light of the post-programme surveillance process that is in place. For various reasons, I am not in a position to accept the proposed amendment at this time.

We are not discussing a predetermined attempt to determine prices, but people's negotiation of contracts with State providers. The HSE or another organisation could be seeking people to provide a service on its behalf in a normal business practice. Technically, the people might be self-employed, but they are actually being employed by the State to deliver on contracts. In any business, people have a right to negotiate their contracts, the terms and conditions of same and how the contracts are delivered. Competition law is being used to prevent proper negotiation.

The Minister might update the committee on the court case's timing. It was due to be heard in April. When the might of the State can enforce competition law so as to make negotiations on behalf of service providers difficult, the situation needs to be resolved. We cannot use competition law to defend that practice.

At the heart of the Bill and the Government's approach should be the prevention of abuse of supplier power and buyer power within the market. Different sections of buyers and suppliers need to be able to engage commercially in a fair manner with their counterparts. I have in mind small convenience stores and so on that engage with an oligopoly in the provision of newspapers. It is difficult for them to engage on the prices and conditions under their contracts. If they were able to communicate, negotiate or even discuss the matter as a representative group, though, they would probably create a more equal commercial relationship. Competition between buyers and an oligopoly of suppliers creates an unequal and unfair negotiations base.

In Australia, provision is made for representative groups to negotiate on behalf of their organisations. As long as such groups in Ireland do not abuse their buyer power, which is something that can be controlled, I do not know why the Minister will not allow them some space.

If one is an employee of the State, one can negotiate through a trade union. If one is a self-employed, independent operator, however, one can negotiate on all issues other than fees, in which regard one is only permitted to consult. Deputy Tóibín asked whether this was a fair balance. The State is not regarded as a monopoly in that sense. It represents the public and is not comparable to a monopoly. One cannot have groups of independent undertakings, be they self-employed or incorporated, acting in concert to set fees. That is prohibited by the section in the Act in the interests of consumers and the marketplace. This provision is designed to protect a market that operates in a fair way. Obviously, if one is an employee, one can negotiate. If one is self-employed, one can negotiate on non-fee items and consult in respect of fees.

To address Deputy Calleary's point, I understand that the case will be heard on 21 May.

I thank the Minister for that update. How can a consumer be protected when a powerful agency of the State that seeks to provide a service uses competition law to restrict the ability of those providing the service to negotiate their terms and conditions? That is what is happening, and not just in that particular case. I gather that it also applies to actors. A range of people who provide services join together in representative organisations. If they are workers, those organisations are called unions and can negotiate the terms and conditions of their employment. The other people in question are self-employed, but that is due to the professional make-up. They are providing an essential service to part of the State, yet the State is using its might and competition law to prohibit a level playing pitch. This is most definitely not in the interests of the consumer.

There is a clear dividing line on fees. All non-fee terms and conditions can be negotiated. The dividing line is between employees, who can negotiate on wages, and incorporated or self-employed people, who cannot. Anyone operating as an independent, large undertaking would probably be regarded as a cartel if it decided to fix a price in negotiations with the State. The dividing line is between employees, who are free to negotiate on wages, terms and conditions, and undertakings, including independent and self-employed sole traders, which can negotiate on everything except fees. This is meant to prevent price fixing. It is at the core of EU competition law, from which our competition law is derived. We are not-----

The State is in many instances fixing the price.

The State is acting in the public interest and negotiating terms and conditions. It sets a fee but this is in the same way it does not enter into negotiations with suppliers of electricity on price.

This is not just related to the State and there are examples of monopolies or oligopolies which exert unfair influence in their negotiations with small multiple organisations. If the Minister is worried that some price fixing or a cartel could emerge, he could within the legislation propose that if the groups came together they could only represent a portion of the sector. Alternatively, there could be a turnover limit, which has already been discussed with this Bill, and that would ensure there would be no worry about cartels.

Competition law does not provide for the Minister to adjudicate as whether he or she likes the cut of one's jib. There is a very clear line derived from the treaties at the foundation of the European Union. The relevant elements were the old articles 81 and 82. At the heart of that is the distinction between an employee and an undertaking, and undertakings cannot in effect seek to set fees, regardless of who is involved. That is whether it is the public as a broad and undifferentiated mass of consumers or the State as a representative because it funds the service. That is the heart of this distinction and it is designed to protect the idea of fairness. It relates to groups of independent undertakings seeking to work together and set a fee. It has an effect on negotiations such as this and, for example, in the medical area there are discussions which could involve negotiations about everything except the fee element. In that case there can be consultation but not negotiation. In that case the Minister sets the price because there cannot be a group combining to set a price.

The Minister is making a point about trying to stop groups colluding and we are making the same one. We are trying to stop groups colluding. Newspapers are delivered by two wholesalers and because of their market dominance, they have a very powerful influence over the terms, conditions and price in the engagement with the plethora of newsagents around the country. As a result of the imbalance in power between the supplier and buyer, that type of collusion is more likely to happen under current circumstances. By levelling the relationship in allowing newsagents to come together in a representative organisation in order to negotiate with the two wholesalers, it would be more likely that we would not have the kind of experience we now have. The Minister's argument is the same as ours.

The legislation is in its current state for a good reason. If a dominant group of purchasers is dealing with a dispersed group on the other side of a deal, it would be caught under the provisions of abuse of dominance, which limits what it can do. The group cannot collude either. There would be two restrictions on the more dominant "oligopoly", as the Deputy described it, as it cannot collude because of the first section and it cannot abuse its dominance. On the more dispersed side of the market, the provision is that the parties cannot collude. That means they cannot form a combination to try to set fees, although they can negotiate on other matters. It would be strange to authorise the Minister to decide which is the stronger or weaker party, with the Minister being set up to allow one party to collude in controlling the market. That would not equate to competition law, the point of which is to be independently enforced against a clear set of rules.

It is not being enforced, which is a key issue.

We have a group of providers dealing with a dominant force, which is the State, and it is abusing that dominance while using competition law to cover that abuse.

Due to a lack of funding, the Competition Authority is in a very difficult position and simply focuses on business to consumer type practices. It does not really have the function to deal with business-to-business type practices. I have been using the example of newsagents, which were forced to bring a High Court injunction into their interactions with one of their suppliers at a cost of €29,000, which is an onerous expense for any small group of organisations. That money had to be spent as the Competition Authority did not have the capacity to focus on that element at all. The Minister's point about enforcement is moot on this occasion as the capacity was not there to enforce. If the market is allowed the ability to even up the power balance, the Competition Authority would not have to do that work.

The market rule is very clear and traders cannot collude or combine to seek to set fees. That is true in the case outlined by the Deputy, involving two or three suppliers, or when it involves 40, 50 or 1,000 suppliers. The rule is they cannot collude to set fees. The Competition Authority has extra resources for enforcement and it can take cases either where it believes there is collusion and parties are combining to control fees on either side of the market or where they are abusing dominance and acting in a predatory way, for example. The Competition Authority stands ready to enforce the rules but the rules are clear-cut in this respect. Where there is an undertaking parties cannot combine to try to set fees. They can negotiate on other conditions, such as with professional groups.

The issue is how this has operated in practice in respect of where the State is on one side of the market, and although there has been consultation, the State ultimately decides the fee. As we saw during the crisis, the State decided to reduce all those fees across the board, which it did without negotiation, with the Financial Emergency Measures in the Public Interest Acts. The State is not a monopolist in the way a private trading organisation would be regarded as such, and that is correct. For example, in the health area the State represents the collective body of patients. That distinction must be drawn and it is upheld by European law, which is reflected in our law. It is there for good reason.

Amendment put:
The Committee divided: Tá, 2; Níl, 7.

  • Calleary, Dara.
  • Tóibín, Peadar.

Níl

  • Bruton, Richard.
  • Collins, Áine.
  • Conaghan, Michael.
  • English, Damien.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
Amendment declared lost.
Section 3 agreed to.
NEW SECTION

I move amendment No. 3:

In page 9, between lines 7 and 8, to insert the following:

"Time limit for institution of summary proceedings

4. Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act 1851, summary proceedings for an offence under this Act may be instituted within 2 years from the date on which the offence was alleged to have been committed.".

This amendment extends the time limit for the institution of summary proceedings set out in the Bill at section 23(3) relating to the prohibition on unauthorised disclosure of confidential information by members, staff or consultants of the new commission; at section 34(7) relating to persons falsely representing themselves as authorised officers of the new commission; and at inserted section 28N(4) relating to unauthorised disclosure of confidential information by members, staff and consultants of the Broadcasting Authority of Ireland relating to media mergers, to two years from the six month period set out in the Petty Sessions (Ireland) Act 1851.

Why two years and not seven years?

It is judged that it would be too long for a summary offence.

Amendment agreed to.
Section 4 agreed to.
NEW SECTION

I move amendment No. 4:

In page 9, between lines 11 and 12, to insert the following:

"Transitional provisions relating to mergers

5. Where a merger or acquisition was notified under Part 3 of the Act of 2002 before the commencement of section 5(1)(a) and Parts 3 and 4, then, upon such commencement, the Act of 2002 shall apply to the merger or acquisition as if the amendments effected by section 5(1)(a) and Parts 3 and 4 had not been made.".

This amendment provides that merger applications made under the current regime, that is, those made in advance of the commencement of the revised merger regime, are to be dealt with under the current regime under the Competition Act 2002, not the revised one in the Competition and Consumer Protection Bill 2014. This is to give legal certainty.

Amendment agreed to.
Section 5 agreed to.
SECTION 6

I move amendment No. 5:

In page 9, line 28, after "Act" to insert "no later than 3 months following enactment of this legislation".

The Minister's last words regarding amendment No. 4 were "legal certainty". By not having a date for the establishment of the legislation, it creates legal uncertainty. The purpose of the amendment is to create legal certainty. As the Minister stated, the Competition Authority is due before the courts on 21 May. An establishment day for the new body would do a service to the sector by creating such certainty.

I cannot accept this amendment. The provision in the Bill is a standard provision, that I, as Minister, may appoint by order a day to be the establishment day of the new Competition and Consumer Protection Commission, and I intend to commence it as soon as possible after the Bill is passed. We should not be putting into primary legislation such matters as a date. The approach is that I will be seeking to move this as rapidly as possible, but I am not accepting this amendment.

Amendment put and declared lost.
Section 6 agreed to.
SECTION 7

I move amendment No. 6:

In page 10, between lines 6 and 7, to insert the following:

"(2) Any resources used by the Commission shall be allocated by application of a set of priority principles in the public interest.".

It is standard - we need to move away from the standard - that there is quite a lot of reference throughout the Bill in regard to the Competition and Consumer Protection Commission that the Minister or the Government sets priorities. This is to ensure that there is another measurement of priorities so that there will be a public interest measurement of the priorities of the commission.

Under the proposed legislation, the new Competition and Consumer Protection Commission will be independent in the carrying out of its functions and duties. In this context, it will have to operate within the legislative framework set out in the Competition and Consumer Protection Act and the obligations placed on it by EU legislation.

Resources will be made available to the new commission in the same manner as all other State bodies as part of the budgetary and Estimates process within the employment control framework. Currently, both the Competition Authority and the NCA already operate according to published prioritisation principles.

The Bill provides, in section 28, that the new commission will issue a strategy statement every three years which will be laid before each House of the Oireachtas and which will, among other matters, set out the key objectives, outputs and related strategies, including use of resources, of the commission. This will give the visibility and transparency to the work of the commission when taken together with its annual reports. It is also worth noting that section 18 of the Bill provides that I, as Minister, may issue directions in writing to the commission requiring it to comply with such policies of the Government as are specified in the direction and such directions must be laid before each House of the Oireachtas.

In light of the above, I do not believe that this amendment is necessary and I am not in a position to accept it.

Amendment, by leave, withdrawn.
Section 7 agreed to.
Sections 8 and 9 agreed to.
SECTION 10

I move amendment No. 7:

In page 15, line 8, after "inability," to insert "not exceeding 12 months,".

If somebody is temporarily unavailable, there needs to be some sort of, to use the Minister's phrase, "certainty" provided as to what is meant by "temporarily", given the importance of the role of the commission and the importance of the commission members. My party proposes that there be a 12 month time period put on temporary inability.

Under the Bill, provision is made for the appointments being made to the new Competition and Consumer Protection Commission following an open recruitment competition to be run by the PAS. This replicates the system that currently exists for the Competition Authority.

The mechanics of advertising, interviewing and then taking into account the need for successful applicants to give some months' notice to their current employers, possibly up to three months, means that the entire recruitment and selection process could take a number of months to conclude during which period the commission would not be allowed to function without the requisite membership if a number of vacancies had arisen. Thus the Bill repeats, at section 10(5) the provisions of the Competition (Amendment) Act 2010 which allows the Minister for Jobs, Enterprise and Innovation to appoint whole-time members for a short period to provide cover up to the point when whole-time members are appointed following the holding of a PAS competition. In that context, as laid out in sections 10(10) and 10(11) of this Bill, such members may only be appointed for an initial maximum period of six months, with a further period or periods allowed provided the total period for that temporary member does not exceed 12 months. This provision was utilised in 2010 and appointments made for less than the 12 month period.

Finally, at section 10(3)(b), the Bill also repeats the provisions of the Competition Act 2002 in regard to the appointment of temporary whole-time members to address a situation where a member is temporarily unable to discharge his or her duties. Such provisions are intended to cover illness of a member or unavailability to attend a meeting of the commission if that member is out of the country and cannot take his or her part in that meeting with a knock-on impact on the statutory quorum for that meeting. Thus, they are of short duration and specific to a given unforeseen situation. They have, in the case of the Competition Authority's experience to date, consisted of members of staff being appointed for limited periods to ensure authority meetings could take place with the required quorum, often at short notice. In summary, if a longer-term vacancy arises, the provisions under sections 10(5), 10(10) and 10(11) will operate. If there is a shorter-term vacancy, then section 10(3)(b) will operate.

In light of the above, I do not believe that the proposed amendment from Deputy Calleary is necessary and I am not in a position to accept it.

Amendment, by leave, withdrawn.

Amendments Nos. 8 and 9 are related and may be discussed together by agreement.

I move amendment No. 8:

In page 16, line 6, to delete "A member of the Commission" and substitute "Subject to subsection (13), a member of the Commission".

These amendments to section 10 provide for a maximum of two terms for future members of the commission. This will only apply to members appointed after the commission has been established as current members were appointed with no maximum stipulation in their terms and conditions. However, as the current members are on fixed-term contracts, any application for reappointment must be approved by the Minister for Jobs, Enterprise and Innovation with the consent of the Minister for Public Expenditure and Reform. Traditionally, it has been the practice to limit the term office to two terms.

Amendment agreed to.

I move amendment No. 9:

In page 16, between lines 7 and 8, to insert the following:

"(13) A member of the Commission who has served 2 terms of office shall not be eligible for reappointment to the Commission, and any period during which a person serves as a member of the Commission by virtue of subsection (1) shall, for the purposes of this subsection, be deemed not to be a term of office.".

Amendment agreed to.
Section 10, as amended, agreed to.
Sections 11 and 12 agreed to.
SECTION 13

I move amendment No. 10:

In page 18, between lines 11 and 12, to insert the following:

"(9) Vacancies of the Commission membership will be filled within 3 months.".

The Government has a poor record on filling vacant positions. Over Christmas, there unfolded an issue with the Standards in Public Office Commission, SIPO, not having positions filled thereby reducing its ability to do its job and to carry out its investigations.

It seems the Bill seeks to remedy the symptom rather than the cause.

It is necessary that the legislation prevents ongoing long-term vacancies, which is what my amendment seeks to do.

I have just outlined the mechanics and experience of filling vacancies in the membership of the Competition Authority.

In regard to Deputy Calleary's amendment, the way it works is that if a longer-term vacancy arises we appoint a person under the PAS system, and in the shorter term we operate under section 10(3)(b). I do not think the Deputy's amendment adds anything. Clearly, the process of advertising, filling the position and working out notice with an existing employer could run beyond three months. Providing for this is unnecessarily restrictive, and it does not have a place in primary legislation.

The general rules of the Competition Authority require that a quorum be present. There is always a move to fill a vacancy, either, as I said, on a temporary basis or using a longer-term appointment. The commission does not operate like a normal State board where there are appointees. These are professional people whose posts are filled using the Public Appointments Service.

Amendment, by leave, withdrawn.
Section 13 agreed to.
Sections 14 and 15 agreed to.
SECTION 16

I move amendment No. 11:

In page 20, to delete lines 26 and 27 and substitute the following:

"(b) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 5 years or both,

(c) if the contravention concerned continues for one or more days after the date of its first occurrence, the person referred to in this subsection is guilty of a separate offence for each day that the contravention occurs; but in respect of the second or subsequent offence of which he or she is guilty by reason of that continued contravention, paragraph (b) shall have effect as if “€25,000” were substituted for “€250,000.”.

The proposal in the Bill refers to "on conviction on indictment, a fine not exceeding €30,000." The people we are dealing with like to ram a coach and four through competition law for the organisations that they work for or represent, and a fine of €30,000 means literally nothing to them. If we are serious about establishing competition law and ensuring that it stands up for the small guy then we need to raise the fine to something that such people might think about, such as €250,000. Not only are they not wary of the fine, they will repeat the offence and know that new proceedings would have to be taken. For every day the offence continues there needs to be a higher penalty.

There is some merit in what Deputy Calleary suggests. If the Minister is agreeable, I will revert on Report Stage and get advice on what he proposed.

Amendment, by leave, withdrawn.
Section 16 agreed to.
Section 17 agreed to.
SECTION 18

I move amendment No. 12:

In page 23, line 1, to delete “give a direction in writing to the Commission requiring it to comply with” and substitute “request the Commission to comply with”.

This is a small technical amendment which states that the Minister and his officials can issue a direction and are not restricted to writing. My amendment proposes that they can use any new kind of technology that is available, or that might be available and that we do not know about, to communicate with the commission.

Having considered the proposed amendment, I have concluded that it has the dual impact of removing the requirement that any direction made by the Minister under section 18 be given in writing and changing the nature of that direction from the current requirement to comply with the direction to one of requesting the commission to comply. Removal of the written element is the more problematic of the two elements contained in the proposal. As proposed, it would weaken the provision by allowing for verbal or oral directions which may be open to interpretation and legal uncertainty both for me as Minister and for the commission. Having the direction in writing allows for certainty for both parties. It would also mean that the transparency safeguard provided for under section 18(2), namely "The Minister shall lay a copy of the direction ... before each House of the Oireachtas" would be inoperable. This would not be a desirable situation for all parties. I do not see merit in what has been proposed in the amendment for all of those reasons.

Amendment, by leave, withdrawn.
Section 18 agreed to.
Sections 19 to 23, inclusive, agreed to.
SECTION 24

I move amendment No. 13:

In page 26, to delete lines 5 to 21 and substitute the following:

"Comptroller and Auditor General, give evidence to that Committee.".

The section verifies the accountability of the chairperson to the Committee of Public Accounts. There is a feeling at the moment that the Government is secretly uneasy with it and the role that it is undertaking. I thought it was unusual for the standing orders of the committee to be repeated in legislation. Is this an effort by the Government to copperfasten the remit under which the Committee of Public Accounts seeks accountability? My amendment communicates that unease.

There is nothing sinister in what we are doing here. I note that the amendment from Deputy Tóibín seeks to delete the list of issues on which the Committee of Public Accounts can seek evidence from the chairperson of the new competition and consumer protection commission. These are standard issues which differentiate the deliberations of the Committee of Public Accounts from the deliberations of other committees that the chairperson can be invited to attend, and which are covered by section 25 of the Bill.

As I do not see any added value from the Deputy's proposal, I am not in a position to accept it. This is not an attempt to circumscribe anything. Clearly, an accounting officer is accountable to the Committee of Public Accounts for matters within the purview of the PAC. To other committees he or she is accountable in respect of other dimensions of the work of that body. There is nothing underhand about the provision.

Amendment, by leave, withdrawn.
Section 24 agreed to.
Sections 25 to 27, inclusive, agreed to.
SECTION 28

I move amendment No. 14:

In page 30, to delete lines 22 to 25 and substitute the following:

"(6) The Minister may, from time to time, request the Commission to consider guidelines from him or her concerning the preparation of the Commission’s work programme and the Commission may consider same.".

Occasionally, in terms of the proposed work of the commission, items will arise that may not be in sequence or in its plan and an issue may arise out of nowhere. My amendment gives the power to a Minister of the day to give the commission an opportunity to investigate issues that arise, such as an emergency issue, and gives it resources to do so.

The proposed amendment essentially changes the thrust of the provision in the Bill from the Minister having the power to issue directions or guidelines to the commission concerning the preparation of the work programme, with which the commission must imply, to a provision which sees the Minister requesting the commission to consider any guidelines the Minister issues, which the commission may consider.

The provision in the Bill is a fairly standard one and has analogous provisions in both the Competition Act 2002 and the Consumer Protection Act 2007. The proposed amendment from Deputy Calleary appears to weaken the powers of the Minister in respect of the preparation of the commission's work programme. However, its drafting appears to be consistent with the proposed amendment from Deputy Calleary in respect of section 18, in that it removes any power of the Minister to issue directions. In that context, consistency with the approach on the latter proposal would see a rejection of this proposal for section 28.

The provision is about the commission drawing up its work programme. The Minister is entitled to set things such as key performance indicators, ask for advocacy reports to be drawn up or consumer issues to be addressed that are of public concern. The Minister does not have power in respect of its statutory duties to investigate and so on because it operates entirely independently. It is reasonable for the Minister to have powers that require compliance of a more broad brush. It does not seek in any way to trample on the commission's independence in its core work.

Amendment, by leave, withdrawn.
Section 28 agreed to.
Section 29 agreed to.
SECTION 30

I move amendment No. 15:

In page 31, between lines 25 and 26, to insert the following:

"(2) The Minister shall, within six months of a report being submitted to him or her by the Commission, outline to each House of the Oireachtas, the actions the Minister has taken following on from any recommendations made in such a report.".

The commission publishes annual reports and, given its powers, one hopes it will make recommendations on various policy areas.

The Minister of the day should respond within six months of the annual report being presented on the Department's views on the recommendations made and with an action plan. This would ensure that would happen.

The Bill provides that the new Competition and Consumer Protection Commission will, under section 30, submit an annual report to the Minister for Jobs, Enterprise and Innovation who will lay it before the Houses of the Oireachtas. It is not normal for such reports to contain recommendations. However, the Bill also provides in section 8, as part of the functions of the new commission, for it to undertake studies or analysis, including at the request of the Minister under subsection (4). This is based on existing legislation - the Competition Act 2002 and the Consumer Protection Act 2007. In this context, the commission will be able to make recommendations to the Government and Ministers, etc.

On the Competition Act 2002, the Competition Authority may report on how competition is working in different sectors and has done so on many occasions. It has made recommendations to improve how competition works in these sectors. Such recommendations are addressed to the relevant Minister, public body or representative body, as appropriate. While the new commission may be expert in the area of competition and consumer protection, it will not have the wider public policy role of Departments. Ministers and Departments must consider issues from more than one policy perspective and weigh competing and conflicting policies against each other. A single focus of an expert body does not typically allow such wider considerations to enter its deliberations. In practice, the Government has agreed that the relevant Minister responsible for the area under the Competition Authority must report to the Government within nine months on his or her reaction and the Government notes the issue or takes a decision on it. It is expected that the same will apply to reports of the new commission. I am, therefore, not in a position to accept the amendment.

I will come back to the matter on Report Stage, having reflected on what the Minister said. Rather than it being expected that the same provisions will apply, there should be compellability. There is no sense in having recommendations if there is no action plan and no follow-on. I will withdraw the amendment, while reserving the right to come back to the matter on Report Stage.

Amendment, by leave, withdrawn.
Section 30 agreed to.
SECTION 31
Question proposed: "That section 31 stand part of the Bill."

I will come back on Report Stage with an amendment to bring the provision in the Bill into line with the latest wording in the Protected Disclosures Bill.

Question put and agreed to.
Sections 32 to 34, inclusive, agreed to.
SECTION 35
Question proposed: "That section 35 stand part of the Bill."

I am considering further refinements and clarifications of powers for authorised officers under the Competition Act 2002 and may revert to the matter on Report Stage in that context.

Question put and agreed to.
Sections 36 to 45, inclusive, agreed to.
SECTION 46

I move amendment No. 16:

In page 45, line 19, to delete “definition” and substitute “definitions”.

I am considering further refinements to definitions and provisions included in the Competition Act 2002 and may revert to the matter on Report Stage in this context. This applies to Part 3.

Amendment agreed to.

Amendments Nos. 17, 32 to 35, inclusive, and 38 to 41, inclusive, are related and will be discussed together.

I move amendment No. 17:

In page 45, line 20, to delete “2009;”,” and substitute the following:

“2009;

‘Council Regulation’ means Council Regulation (EC) No. 139/2004 of 20 January 20041 on the control of concentrations between undertakings;”,”.

This amendment involves a grammatical change.

Amendment agreed to.

I move amendment No. 18:

In page 45, line 24, to delete “deleting the definition of “Commission”,” and substitute the following:

“substituting the following definition for the definition of “Commission”:

“ ‘Commission’ means the Competition and Consumer Protection Commission;”,”.

This is a technical amendment.

Amendment agreed to.

Amendment No. 19 is consequential on amendment No. 20 and they will be discussed together.

I move amendment No. 19:

In page 45, line 26, to delete “and”.

This is a technical amendment to delete the word "and". Amendments Nos. 19 and 20 have been grouped and refer to the definition of "undertaking" in section 3 of the Competition Act 2002. The definition is being revised to include, where the context so admits, an association of undertakings. This brings the definition for the whole Act into line with the definition in section 14B(11) which was inserted by the Competition Act 2012.

Amendment agreed to.

I move amendment No. 20:

In page 45, line 30, to delete “2009;”.” and substitute the following:

“2009;”,

and

(f) by substituting the following definition for the definition of “undertaking”:

“ ‘undertaking’ means a person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service and, where the context so admits, shall include an association of undertakings.”.”.

Amendment agreed to.
Section 46, as amended, agreed to.
Section 47 agreed to.
NEW SECTIONS

I move amendment No. 21:

In page 45, after line 33, to insert the following:

“Amendment of section 14A of Act of 2002

48. Section 14A of the Act of 2002 is amended by inserting the following subsection after subsection (5):

“(5A) (a) Where, in an action under subsection (1), the competent authority seeks relief by way of interlocutory injunction, the Court shall not, save in exceptional circumstances, as a condition of granting the injunction, require the competent authority to lodge an undertaking in respect of damages with the Court.

(b) For the avoidance of doubt, where in an action under subsection (1), the competent authority seeks relief by way of interim injunction, nothing in paragraph (a) shall be construed as imposing an obligation on the Court to require a competent authority to lodge an undertaking in respect of damages as a condition of granting the injunction.”.”.

With regard to interlocutory injunctions, the amendment provides that the courts shall not, except in exceptional circumstances, require an undertaking from the Competition and Consumer Protection Commission as a condition of granting such an injunction. With regard to interim injunctions, the amendment provides that, for the avoidance of doubt, nothing in the first amendment relating to interlocutory injunctions shall oblige the courts to seek an undertaking from the Competition and Consumer Protection Commission when the commission seeks an interim injunction. The amendments are intended to ensure public enforcement of competition law offences is not hindered by demands for undertakings from the State on damages at the time of injunctions being sought by the Competition and Consumer Protection Commission. This allows enforcement to occur without the court, as a normal process, requiring an undertaking by the commission to meet damages. It should only be in exceptional circumstances that the court should do so. The justification is to allow public enforcement to proceed without major financial undertakings being made to the court by the commission. The amendment is drafted so as to respect the independence of the courts.

Amendment agreed to.

Acceptance of amendment No. 22 involves the deletion of section 48 of the Bill.

I move amendment No. 22:

In page 46, before line 1, to insert the following:

“Amendment of section 14B of Act of 2002

49. Section 14B of the Act of 2002 is amended—

(a) in subsection (1), by substituting the following paragraph for paragraph (a):

“(a) following an investigation referred to in—

(i) paragraph (c) of subsection (1) of section 8 of the Competition and Consumer Protection Act 2014, by the Commission, or

(ii) section 47A (inserted by section 31 of the Communications Regulation (Amendment) Act 2007) by the Commission for Communications Regulation, and”,

and

(b) by deleting subsection (11).”.

This amendment amends section 14B of the Competition Act 2002 to update references to reflect the provisions of the current Bill and gives the Commission for Communications Regulation concomitant powers to the Competition and Consumer Protection Commission to apply to the High Court for orders in relation to certain agreements. The provision had been inadvertently omitted from the Competition (Amendment) Act 2012 when such powers were granted to the Competition Authority. The last amendment, to delete subsection (11) of section 14B, is consequential on substituting a new definition of "undertaking" in section 3 of the 2002 Act, as provided for in the proposed amendment to section 46.

Amendment agreed to.
Section 48 deleted.
Sections 49 and 50 agreed to.
SECTION 51

I move amendment No. 23:

In page 47, lines 26 to 28, to delete from “3A.” in line 26 down to and including “section 26.”.” in line 28 and substitute the following:

“3A.”.”.

This is a drafting amendment to remove the superfluous provision intended to aid interpretation of the words "commitment" and "determination".

Amendment agreed to.
Section 51, as amended, agreed to.
SECTION 52

Amendments Nos. 25, 26 and 30 are consequential on amendment No. 24 and they may be discussed together by agreement.

I move amendment No. 24:

In page 47, between lines 30 and 31, to insert the following:

"(a) by substituting the following subsections for subsection (1):

"(1) Where?—

(a) in relation to a proposed merger or acquisition, in the most recent financial year?—

(i) the aggregate turnover in the State of the undertakings involved is not less than €50,000,000, and

(ii) the turnover in the State of each of 2 or more of the undertakings involved is not less than €3,000,000, or

(b) a proposed merger or acquisition falls within a class of merger or acquisition specified in an order under subsection (5),

each of the undertakings involved in the merger or acquisition shall notify the Commission in writing, and provide full details, of the proposal to put the merger or acquisition into effect.

(1A) A notification under subsection (1)?—

(a) shall be made before the proposed merger or acquisition is put into effect, and

(b) may be made after any of the following applicable events occurs:

(i) one of the undertakings involved has publicly announced an intention to make a public bid or a public bid is made but not yet accepted;

(ii) the undertakings involved demonstrate to the Commission a good faith intention to conclude an agreement or a merger or acquisition is agreed;

(iii) in relation to a scheme of arrangement, a scheme document is posted to shareholders.”,

(b) in paragraph (c)(i) of subsection (2)?—

(i) by substituting “(ii)” for “(iii)”,

(ii) by substituting “references to turnover in the State” for “references in them to the world-wide turnover and turnover in the State”, and

(iii) by substituting “references to turnover in the State” for “references, respectively, to the world-wide turnover and turnover in the State”,

(c) by substituting the following subsection for subsection (3):

"(3) In the case of a proposed merger or acquisition that is not required to be notified under subsection (1), any of the undertakings involved in the merger or acquisition may, before putting the merger or acquisition into effect, notify the Commission in writing, and provide full details, of the proposal to put the merger or acquisition into effect, and such notification may be made after any of the applicable events referred to in paragraph (b) of subsection (1A) occurs.”,

(d) in subsection (4), by substituting “the Council Regulation” for “Council Regulation (EEC) No. 4064/89 on the control of concentrations between undertakings”,”.

This is a long amendment and has a number of distinct parts. The first amendment at (a), covering subsection 18(1) and subsection (1A), has two parts. The first part provides for a new section 18(1) on the setting of appropriate thresholds for merger notifications. The setting of such thresholds is crucial to ensure that mergers that raise substantial lessening of competition concerns are captured by the compulsory notification system. At the same time, it is necessary to be mindful that these thresholds must strike a balance between the need for the Competition and Consumer Protection Commission to review transactions having a nexus to the State while not placing unnecessary burdens on business with respect to lodging notifications.

A study of the current threshold regime in Irish law was undertaken to determine whether it is in line with practice elsewhere and has recommended a number of changes to the thresholds as follows: first, the dropping of the worldwide turnover threshold, which means that the new Competition and Consumer Protection Commission will only review mergers which have a real nexus to the State; second, the introduction of a combined turnover level for the State of €50 million in place of €40 million turnover for one of the parties; and third, an increase of the sales to €3 million from €2 million for each of two or more undertakings involved in the State to ensure that the notified merger involves two firms each with a non-insignificant role in the State's economy.

The overall aim of these changes is not to seek an increase or a decrease in the number of notifications received by the new Competition and Consumer Commission but to ensure that the notifications received have a real nexus to the State. While it is not possible to gauge the extent to which merger notifications will decrease or increase as a result of these proposals, the proposed revisions to the thresholds set out above will provide legal certainty and clarity for all stakeholders involved in merger analysis and will also allow the new Competition and Consumer Protection Commission to focus on notifications with material issues and with a real nexus to the State and thus identify if there is any overlap between the activities of the parties that may well result in a greater potential impact on competition within the State and bring the thresholds applied in the State further in line with international best practice for setting thresholds.

The second part of the first amendment sees the provision of a new subsection 18(1)(a) to bring Irish legislation into line with the EC merger regulation, Council Regulation 139 of 2004, to provide that undertakings can notify to the new Competition and Consumer Protection Commission mergers or acquisitions on the basis of a good faith intention to conclude an agreement or the announcement of a public bid. This provision will reduce the inclination of firms to jump the gun as they will be in a position to make a notification earlier in the transaction process.

The third substantive amendment at (c), covering subsection 18(3), is also in the main a drafting amendment consequent on the first amendment being proposed while also removing the one month deadline for the voluntary notification of any merger that is not required to be notified by law. This allows for notification at a later stage, if necessary, without imposing an unnecessary burden on the parties who wish to make the voluntary notification. Such voluntary notifications are sometimes considered desirable by merging bodies to ensure that the merger itself is competition law-proofed and thereby ascribed legal certainty into the future.

The other elements of the proposed amendment are drafting amendments consequent on the first amendment being proposed, as are amendments Nos. 25, 26 and 30.

Amendment agreed to.

I move amendment No. 25:

In page 47, to delete line 37.

Amendment agreed to.

I move amendment No. 26:

In page 48, to delete line 5 and substitute the following:

"subsection.",

(e) in subsection (13), by substituting "the Council Regulation" for "Council Regulation (EEC) No. 4064/89 on the control of concentrations between undertakings", and

(f) in subsection (14), by substituting "the Council Regulation" for "Council Regulation No. 4064/89".".

Amendment agreed to.
Section 52, as amended, agreed to.
SECTION 53

I move amendment No. 27:

In page 48, line 20, to delete "unless" and substitute "and unless".

This is a drafting amendment.

Amendment agreed to.
Section 53, as amended, agreed to.
NEW SECTION

Acceptance of amendment No. 28 involves the deletion of section 54 of the Bill.

I move amendment No. 28:

In page 48, between lines 33 and 34, to insert the following:

"Amendment of section 20 of Act of 2002

54. Section 20 of the Act of 2002 is amended?—

(a) in subsection (2), by inserting "and an officer (where the undertaking is a body corporate), partner (where the undertaking is a partnership) or any individual in control (in the case of any other form of undertaking) shall certify in writing that to the best of his or her knowledge and belief, the undertaking has complied with a requirement under this section" after "with it", and

(b) by inserting the following subsections after subsection (2):

"(2A) If, before the expiration of the period specified in a notice under subsection (2), the undertaking or undertakings concerned request, in writing, an extension to the specified period, the Commission may, where it considers it appropriate to do so, extend that period, and an undertaking to which such an extension is granted shall comply with the requirement under subsection (2) within the specified period as so extended.

(2B) The Commission, pursuant to a request from the undertaking or undertakings concerned, and where it considers it appropriate to do so, may further extend the period as extended under subsection (2A) or this subsection.".".

Currently, section 22 of the Competition Act 2002 allows the Competition Authority to require further information from an undertaking relating to a merger notification. Although the authority's standard request for the information calls for an officer of the undertaking to certify compliance with such a request, some parties refuse to comply and argue that the authority lacks the power to require such certification. These requests are an important step which contribute significantly to full and accurate responses. This delays examination of the merger, leads to unnecessary disputes, can reward the recalcitrant and prevents the authority from having timely access to needed information.

The proposed amendments to section 22 of the Competition Act 2002 provide that an officer of the undertaking concerned shall certify in writing to the new competition and consumer protection commission that he or she has complied with the request for information. This will add a very small extra administrative burden on the undertaking concerned but the overall gains are fewer delays in the examination process and quicker decisions on merger applications.

The remaining part of the amendment contains some drafting changes from the text that appeared in the Bill as initiated.

Amendment agreed to.
Section 54 deleted.
Section 55 agreed to.
SECTION 56

I move amendment No. 29:

In page 49, line 28, to delete "the requirement" and substitute "the first requirement".

This is a drafting amendment to allow the competition and consumer protection commission to make more than one requirement of one or more undertakings concerned.

Amendment agreed to.
Section 56, as amended, agreed to.
Sections 57 and 58 agreed to.
NEW SECTION

I move amendment No. 30:

In page 51, between lines 13 and 14, to insert the following:

“Amendment of section 27 of Act of 2002

59. Subsection (1) of section 27 of the Act of 2002 is amended by substituting “(ii)” for “(iii)”.”.

Amendment agreed to.
Section 59 agreed to.
Sections 60 to 68, inclusive, agreed to.
SECTION 69

Can I just say at the beginning of Part 4 that I will revert with some further refinements to definitions on the media merger provisions on Report Stage?

I move amendment No. 31:

In page 53, line 30, to delete “prevalent” and substitute “present”.

Before I get to the specific amendment, I mention that we are now on the media section. There seems to be no yardstick or threshold contained in the legislation as to what is the maximum cross-media ownership limit. It seems to me it is an arbitrary decision by the Minister when a media mogul has got into a situation of dominance and where that becomes dangerous. I am not saying a specific formula can be included in primary legislation whereby the Minister would have to act but it is a concern of mine and, I imagine, of many individuals that we are dealing with a media market in Ireland that is very concentrated and is overly located in the hands of a few large powerful business interests.

Given that the media is often the oxygen on which democracy functions, it is really important that this legislation is extremely strong in ensuring a diverse media market. Perhaps the Minister will indicate what his understanding of what the threshold or the limit to cross-media ownership should be.

If it is not put into primary legislation, how exactly will the current Dáil have influence over future Ministers? This specific amendment seeks to substitute the word "prevalent" with "present" because certain cultural issues and identities may not be prevalent within Irish society but they could be present. Minorities should be reflected within media discourse and delivery and my worry would be that the legislation as it is currently worded would mean that some minority cultures or experiences today would be excluded from that reflection.

I will start with the amendment itself. In considering plurality and diversity of content, our definition is taken in its entirety from the advisory group on media mergers report. The term "present" is more absolute than "prevalent" and would make the proper measure of diversity extremely complex. In the context of diversity, if everything that exists in the universe had to be considered, it would be an impossibly difficult test. The word "prevalent" was chosen by the advisory group as it offers a balanced approach. Otherwise, it would be too difficult to interpret.

The wider issue that Deputy Tóibín raises was considered at length by the advisory group. The group felt that specifying metrics in the legislation would be fraught with risk. In the first instance, the question of normal market mechanics arose. If the numbers of active market participants in a given media market were to reduce over time to the extent that the concentration metric was breached without a merger having taken place, then the next merger would have to be ruled out regardless of its merits. This would be particularly relevant for a country like Ireland that has a relatively small media market and where the application of reasonable limits on concentration could be undermined following the closure of a single media outlet.

Second, the question of which index to use also arises, something of emerging concern given the rise of online media. Already the question of how to measure cross-media impact arises. How does one accurately measure the relative weight of newspaper circulation, radio and television audiences and online page views or downloads? This is an issue of judgment that has to be applied and that is why we have a process of consultation, with expert groups assessing and advising.

The Deputy also raised a concern about whether this allows the whole thing to run away without the Oireachtas. What is now required is that the relevant Oireachtas committee is advised and notified of the merger. The Oireachtas committee is one of the bodies whose view is taken into account. The legislation requires that the Minister notifies the relevant Oireachtas committee and invites a submission from it and any such submission then has explicit recognition as one of those documents to which the Minister must give regard in coming to a decision. Of course, if a Minister comes to a decision, he or she must provide an order in the House too. The Oireachtas has influence throughout the process. As I said on Second Stage, seeking to pin down and define in very narrow metrics, even in the narrow competition area, never mind getting into the complexity of multiple media dimensions, is impossible. It is a matter of judgment at the end of the day.

The problem I have is that we are dealing with legislation that deals with competition but this section hangs on the fact that there must be competition within the media market but we put no real yardstick or threshold on that. That is a mistake because any Minister or Oireachtas committee can be put under pressure from those same media interests. We have seen media groups exert extreme control over previous Governments. The Bill makes it very difficult for a future Minister to make a strong decision in the public interest on this issue. As far as how to analyse or create an index for media consumption, we have JNLR for print media, Nielsen for broadcast media and so forth so while it may be hard, it is not impossible. Just because it is hard does not mean we should not try to do it. There needs to be some threshold.

I understand the Minister's point about the market being very concentrated anyway because it is small. However, the threshold can reflect that market structure. Regarding the amendment in hand, I believe that there is a problem with the word "prevalent" because it will exclude minorities. The need for minorities to be reflected, with their diversity of cultural interests, in the media is very important. In the context of the section as currently drafted, there is no doubt that minorities who are accepted and respected today would not, a generation ago, have been described as "prevalent". There are likely to be minority groups in Ireland in 20 or 30 years time who are not considered acceptable today who will be present in the future but not prevalent. That is the problem with the wording as it stands. I wish to press my amendment.

Amendment put and declared lost.

I move amendment No. 32:

In page 55, lines 35 and 36, to delete “Council Regulation (EC) No. 139/20041 on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 33:

In page 55, lines 37 and 38, to delete “Council Regulation (EC) No. 139/20041 on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 34:

In page 56, line 6, to delete “Council Regulation (EC) No. 139/20042” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 35:

In page 56, lines 9 and 10, to delete “Council Regulation (EC) No. 139/20042 , on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 36:

In page 56, line 11, to delete “decision” and substitute “determination”.

This amendment substitutes the word "determination" for "decision" and is designed to ensure consistency of language with the language used in other media merger provisions.

Amendment agreed to.

I move amendment No. 37 :

In page 56, line 19, to delete “the European Commission” and substitute “that notified the European Commission”.

This a technical clarification amendment.

Amendment agreed to.

I move amendment No. 38:

In page 57, lines 5 and 6, to delete “Council Regulation (EC) No. 139/20043 on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 39:

In page 59, lines 19 and 20, to delete “Council Regulation (EC) No. 139/20044 on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 40:

In page 63, lines 12 and 13, to delete “Council Regulation (EC) No. 139/20045 on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 41:

In page 68, lines 8 and 9, to delete “Council Regulation (EC) No. 139/20046 on the control of concentrations between undertakings” and substitute “the Council Regulation”.

Amendment agreed to.

I move amendment No. 42:

In page 70, line 43, to delete “was” and substitute “were”.

This is a grammatical amendment.

Amendment agreed to.

I move amendment No. 43:

In page 73, line 13, to delete “ ‘significant interests ’” and substitute “significant interests”.

This is a drafting amendment.

Amendment agreed to.

I move amendment No. 44:

In page 73, line 30, after “internet” to insert “and issue a press statement outlining”.

This is a very simple amendment which aims to increase the stakeholder consultation and engagement when the draft guidelines are published by the Minister. It is simply an attempt to widen the level of engagement.

I believe the Deputy has a point here and again I would suggest revisiting this with a view to an amendment on Report Stage to ensure greater accessibility of the draft guidelines for members of the public, following consultation with the Office of the Parliamentary Counsel.

Amendment, by leave, withdrawn.
Section 69, as amended, agreed to.
SECTION 70
Question proposed: "That section 70 stand part of the Bill."

We are moving into the grocery goods section of the Bill. Will the grocery sector regulations be applied to all food companies?

It will apply to all groceries.

Will it apply to food production companies as well?

Yes; it would apply to them as providers of groceries. They would be at the other side of the trade.

I would like to deal with some areas around that on Report Stage.

At this stage I wish to signal that I will raise this issue on Report Stage. Why is the Minister limiting this to groceries? Let us consider what happens in the newsagent, the grocery shop or the convenience store. There are quite a number of other products such as phone credit, stamps and newspapers, as well as services such as bill payment, which are part of normal commerce. The abuse of supplier power and buyer power is an issue. I know there is an amendment to broaden it a little. Will the Minister discuss why the legislation should not be broadened to encapsulate those areas also?

This provision with regard to groceries has a long history in the House. There was a commitment in the programme for Government in relation to grocery goods. There was public consultation on grocery goods. The approach that needs to be taken in respect of this is that one allows bodies to submit their views and that these views get a proper airing. That has happened in respect of the grocery goods sector. This committee has conducted a number of investigations, as has the Joint Committee on Agriculture, Food and the Marine. This ground has been well trodden. There has been a general consensus across the political parties that something needed to be done in this area. Clearly, if the committee identifies or if there is a general view that there are other areas of difficulty in the supply chain, we will look at that and take advice from the competition and consumer protection commission and from players. This has a long history in the Oireachtas and as a consequence was included in the programme for Government. I undertook consultation with the grocery goods sector. I am not saying that public concern cannot arise in another area. There was a very clear reason for this.

Let me add, while I am in possession, that I am considering some further refinement, definitions and amendments to some provisions of the Consumer Protection Act 2007, and I may revert on Report Stage to Part 5.

I can take it, then, that the Minister is not opposed, after proper consultation with market sectors and proper investigation by his own Department, to the inclusion of other sectors in the Bill in the future.

I am not. I have no principled objection but, as I have said, I would need to see a substantial case made. The Oireachtas has been worrying away at this issue for a very long period and that is why it made its way to the programme for Government. I do not have a closed mind. I think one must always be open in this area and look at how markets are working.

Question put and agreed to.
Sections 71 to 75, inclusive, agreed to.
SECTION 76

Amendment No. 45 is in the names of Deputies Tóibín and Calleary.

I move amendment No. 45:

In page 79, between lines 28 and 29, to insert the following:

“(b) garden plants,”.

I tabled this amendment not just because my mother loves garden plants. It is a significant section of the grocery trade and affects a great many businesses. It is anomalous that it has been left out. I ask the Minister to include it.

Often, those who supply garden plants are small suppliers, and if they are not included in the Bill they will not enjoy the protections afforded by the legislation. They are left open to abuse.

This highlights that the list of products is not exhaustive and that consideration should be given to empowering the Minister through statutory instrument, following consultation, to add to this list. Deputy Tóibín mentioned products that probably were not thought about when the Competition and Consumer Protection Bill was first drafted. There needs to be some flexibility either on the part of the Minister or that of the competition and consumer protection commission around goods as they arise.

I will deal with the last point Deputy Calleary made. I am considering some further refinements to the definitions and provisions of Part 6. I will revert on Report Stage.

I will consult on the possibility of making a statutory instrument giving the Minister flexibility. There may be the view in the Office of the Parliamentary Counsel that it would be straying beyond what should properly be in regulations and would constitute sufficient change in the operation of whatever sector is involved that it should not be done by secondary legislation. In light of the point made, I will seek advice on it.

I will now deal with the amendment. I note that Deputies Tóibín and Calleary are calling for the inclusion of garden plants within the scope of the definition of grocery goods under the terms of the Bill. For the purpose of the Bill, the term "grocery goods" means any food or drink that is intended to be sold for human consumption, which can include items such as any substance or thing sold or represented for use as food or drink for human consumption, or any substance or thing sold or represented for use as an additive ingredient or processing aid in the preparation or production of food or drink for human consumption. It also includes intoxicating liquors, household cleaning products and toiletries. Items such as garden plants go beyond the scope of the meaning and definition contained in the Bill for grocery goods. The public consultation process undertaken on this issue in recent years did not elicit any such proposals, although it is clear that many relevant grocery goods undertakings may sell garden plants along with grocery goods as part of their overall offering to consumers. It is worth recalling that the inclusion of such products under the regulations would mean that a new cohort of businesses such as large garden or DIY-type retailers, suppliers and wholesalers would now come within the definition of relevant grocery goods undertakings. None of these businesses would have engaged in the public consultation process on this issue heretofore, as the discussion centred on the traditional and previous definitions of grocery goods, which did not include garden plants. Thus, there would be an unforeseen extra administrative burden, in their view, imposed on them without any consultation. My initial reaction is not to accept this proposal, but given the importance of this element of the horticultural sector's output, I will reflect on it further in before Report Stage.

I appreciate the Minister's quandary. The Opposition will always clip the ear of a government that does engage in proper consultation. As there is no doubt of that, we cannot give out to the Minister for not seeking consultation.

The key point is that the term "a grocery store" does not meet the current market realities. In the current market, grocery stores, and shops in general, have broadened out considerably and are morphing all the time. If we hang this legislation on the right to make sure nobody abuses player or buyer power, then the logic would be that suppliers of garden plants should be protected in this way. I think we would lose a significant opportunity if the current Oireachtas does not seek to protect those suppliers.

The Minister accepts the need for consultation. We can move into dispute very quickly - more quickly than we may have thought. Will the process of consultation happen before the Bill goes to the Seanad so that we will not have to return in two years' time to deal with the fallout when small producers of garden plants are being hammered by their major buyers without the protection we could bestow on them under the Bill?

There is no doubt about what we are trying to do. The origin of this is the unfair practices that were seen to be arising. The sorts of things that are deemed to have gone on are set out in the regulations. Suppliers were over a barrel and had to agree to unreasonable terms. We are seeking to deal with those practices in the grocery sector, where they were seen as a problem. As the Deputy said and as I accepted in my reply, it creates a bit of a difficulty for me that this issue did not arise during the long period of consultation in the Oireachtas or under the John Travers process. I will reflect on what has been said and see what can be done. I do not want to make undertakings until I get a chance to assess what would be involved and what its impact would be on the sector and the players in the sector. I would like to get an impression of the extent to which the practices about which the Oireachtas is concerned might be occurring in the horticultural sector in respect of plants as opposed to grocery products. This needs to be the subject of a little consideration. I do not want to make undertakings I cannot honour at a later stage. However, I will undertake to reflect on this and ask officials who have an understanding of the sector to assess it. At that stage, I will be in a position to form a judgment.

The purpose of Committee Stage scrutiny of legislation is to enable issues that fell through the cracks during the earlier process of consultation and investigation to be brought up. We are all paid to do our job of bringing these issues to the fore. I know how long it takes for the legislative wheels to turn at Government level. It takes longer from the Opposition's perspective because we just do not have the resources to draft legislation. If the measure we are recommending is not included in this Bill, it is likely that it will not appear until the next Dáil has been elected. We have a responsibility to try to make sure it happens now. Two or three years is a long time in any business, especially a small supplier that is suffering from unfair market practices.

Is the Deputy withdrawing the amendment?

When is Report Stage likely to take place? Will sufficient time be allowed in advance of Report Stage to allow consultation to take place?

It will probably take place in June.

Will the Minister be able to initiate a consultation or review in the interim?

The first thing I will do is assess the extent to which these practices are a problem in the sector. Then I will evaluate the impact they are having on the sector and the suppliers. As I have said, this issue did not arise during the lengthy process of consultation that took place. As the Deputy knows, some contentious matters have had to be dealt with to get to where we are. I do not want to hold up legislation that has been flagged by the Oireachtas as being necessary. Certain broader elements of this legislation relating, for example, to media mergers and the establishment of the bodies should be implemented as a matter of urgency. I need to reflect on the different pressures that exist in this area before I make a judgment call on the merit of this proposal. There has been a great deal of desire to see this legislation move forward. I will seek to come to a quick judgment on this matter. I am undertaking to examine it seriously. I will be in a position to come back to the House on it on Report Stage.

Amendment put and declared lost.

I move amendment No. 46:

In page 80, line 16, to delete "supply or distribution" and substitute "supply, distribution or retail".

This amendment provides for the extension of the definition of "grocery goods undertaking" specifically to cover retail undertakings as well as those involved in the production, supply and distribution of grocery goods. This will provide more legal clarity when regulations are being made.

Amendment agreed to.

I move amendment No. 47:

In page 80, line 18, to delete "€50 million" and substitute "€10 million".

The supply chain in the groceries sector has become increasingly complicated. The Bill as it stands would exclude many of those involved in the supply chain who deal with producers. In many cases, wholesalers deal directly with producers, and the various supermarkets deal with wholesalers. This amendment seeks to give maximum protection to producers and ensure commercial arrangements between producers and wholesalers are subject to the protections of this Bill.

Our perspective is that it would widen the number of intermediate suppliers in the supply chain.

The Deputies are proposing that the turnover threshold specified in the Bill for qualifying relevant grocery goods undertakings should be reduced from €50 million to €10 million annually. The current threshold has been carefully chosen for several good reasons. I will allude to the main considerations in this regard.

First, I am anxious to ensure these provisions are not disproportionate. I am trying to ensure they cover a broad swathe of processors, suppliers and retailers that are not regarded as major players in the national grocery goods sector. Second, the European Commission uses a threshold figure of €50 million in respect of turnover when it is distinguishing between small and medium-sized enterprises and large firms. Third, I am anxious to ensure the regulatory and red tape obligations imposed by regulatory authorities on small and medium-sized enterprises are kept to a minimum. The reductions in the threshold levels proposed by the Deputy would lead to a much higher incidence of administrative burden among SMEs in the grocery sector. Fourth, the UK threshold for qualifying designated retailers for the purposes of that country's Groceries (Supply Chain Practices) Market Investigation Order 2009 is "any Retailer with a turnover exceeding £1 billion with respect to the retail supply of Groceries in the United Kingdom". The threshold of €50 million being provided for in this legislation is based on an extrapolation of the qualifying turnovers under the UK legislation. Fifth, the figure of €50 million emerged as a suggested figure from the public consultation process undertaken on this issue.

A proposed figure of €50 million has been set in this Bill for all of these reasons. I am seeking not to be disproportionate about the ambit of this provision to grocery goods undertakings in the Irish market. In that light, I consider that any reduction in the qualifying threshold of €50 million would impose an unfair burden on many firms in this sector. Therefore, I am not in a position to accept this amendment.

How many firms will be captured by the Bill as it is drafted? How many would be captured - in real terms or in proportional terms - by the Bill if it were amended in the way we seek? I expect the Department would have proportional figures in mind when drafting such measurements.

I do not have that information to hand. Generally speaking, throughout all sectors there are approximately 180,000 small and medium sized enterprises and approximately 4,000 large companies. I suspect that a move to include much smaller companies as well as the large ones would dramatically widen the purview of the legislation. It would widen the chain dramatically. The purpose of this legislation is to deal with abusive practices that are essentially related to market power. If we reduce the threshold to encompass smaller companies in the way that has been proposed, we will move away from the purpose of these regulations, which is to grapple with the fact that strong players are in a position to dictate or change terms at will. I think that is the balance here. I am sure we can seek some information for the Deputy. For example, we can get the data published by the Central Statistics Office.

I would like to pick up on the Minister's point about strong players dictating and abusing terms. I suggest they will be able to use this provision to do that. We know who the strong players are. As we speak, they are employing people who are being paid much more money than any of us are getting to go through this Bill and find ways around it. I predict that the strong players will use the distribution chain for these purposes.

They will use their dealings with the intermediary to abuse the supplier - in other words, the person who makes the effort to grow and supply the food they purchase.

While I agree with the Minister on the need to avoid imposing an administrative burden, providing for this level of protection to the primary producer would not impose a significant burden on companies with a turnover of more than €10 million. The current level of protection for primary producers is not sufficient. To use the Minister's phrase, the dominant providers are using these types of measure to ensure primary producers are not afforded the protection they require.

The Deputy envisages a position in which a large provider would completely change its undertakings and alter its company law structure as a way of bypassing-----

Despite everyone's best efforts and intentions-----

I will ask my officials to examine whether there is a potential for abuse in this area. I have not heard of any such cases.

There are, as everyone knows, cases of abuse in the grocery sector. Last Christmas, produce was sold at prices that did not in any way reflect the value or effort involved in its production.

We are regulating practices rather than prices. In some of the cases to which the Deputy refers, the farmers received the full value but the product was sold at another price. We are not saying that aggressive competition is unlawful, but that it cannot be at the expense of players in the supply chain.

The purpose of the amendment is to ensure greater protection is afforded to producers, especially smaller farmers, in the supply chain.

I have set out the reasons we have pitched the provision in this manner in respect of the international definitions of what are large and small businesses and a comparison with the United Kingdom, which has a model in place. A consultation approach was taken and this emerged as a reasonable provision. There are good grounds for the provision we have made in this regard, which is the reason it has been included. I will, however, examine the possibility of abusive moves being made to frustrate the intention of the legislation, as noted by the Deputy.

The Minister will be aware of numerous examples of businesses which form one company to engage in one activity and another company to engage in a second activity. The use of separate companies enables them to circumvent employment law and constructively dismiss members of staff. I have no doubt this practice will take place in this context if it results in a competitive advantage for the company in question. As such, it will be logical for some of the businesses in question to act in this fashion. If it is our intention to ensure fair trading conditions between companies, surely the proposed amendment would not be an imposition on firms with an annual turnover of €12 million, €15 million or €30 million.

Under the general rules governing fair trading, we do not provide the detailed regulations that are being set out here. Compliance obligations are in place because we would not be able to carry out enforcement without them. They are necessary with regard to the keeping of records. The small firm for which the Deputy is advocating will also have to be compliant in its practices. There are two sides to this argument and we are trying to strike a balance between introducing new compliance obligations for a public purpose, of which we are all aware, and ensuring these obligations are not disproportionate to the risk involved. One chooses a threshold for this reason. As I stated, the threshold was selected for a variety of reasons. If it were lowered, we would add to the administrative compliance costs for businesses, including smaller companies. Moreover, we would do so without having a prima facie ground for suggesting it would have any significant benefit, as these companies are not the players who are typically abusing a position of power in the marketplace. We are trying to strike a balance. As such, the €50 million threshold has a good underpinning.

Amendment put:
The Committee divided: Tá, 2; Níl, 7.

  • Calleary, Dara.
  • Tóibín, Peadar.

Níl

  • Bruton, Richard.
  • Collins, Áine.
  • Conaghan, Michael.
  • English, Damien.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
Amendment declared lost.

I move amendment No. 48:

In page 81, line 13, to delete “who” and substitute “that”.

This is a grammatical amendment.

Amendment agreed to.

I move amendment No. 49:

In page 81, between lines 16 and 17, to insert the following:

“(a) the importance to and impact on the economic viability and sustainability of primary producers of decisions made at processing and/or retailing level,”.

The idea behind this amendment is to ensure a stable environment and economic viability for producers and to ensure this is a key component of the legislation.

This is to do with what we have been saying, that at the base of every supplier industry is a producer but that this has been lost in much legislation because of the new forms of business and distribution. The amendment seeks to return producers to their proper place and give them protection.

This amendment seeks to include a statement in section 63B(1) to the effect that I, as Minister, should include the importance to and impact on the economic viability and sustainability of primary producers of decisions made at processing and-or retailing level when considering introducing regulations. At the outset, let it be clear that the Government is strongly of the view that it is important to ensure there is a balance in the relationship between the various players in the grocery goods sector and that Ireland continues to have robust agrifood and retail sectors, particularly given the importance of these sectors to the national economy.

Regulation of certain practices in the grocery goods sector is intended to achieve such a balance, taking into account the interests of all stakeholders in the grocery goods sector, including the interests of the consumer and the need to ensure there is no impediment to the passing on of lower prices to consumers. This balance is an important issue. In this context, I recall that section 63B(1)(f) of the Bill gives recognition to the importance of the development and maintenance of a strong, efficient and competitive production and supply base in the grocery goods sector. It is important to note that the introduction of any regulation does not and cannot guarantee anything in regard to the prices received by any given link in the supply chain. Negotiations on price will remain an issue for hard negotiation between contracting parties, as happens in any commercial relationship.

What the new regulations intend to achieve is to regulate certain practices rather than set prices. While I believe the issue raised by the two Deputies is already covered by the text of the Bill, I will reflect on this in the context of Report Stage.

Amendment, by leave, withdrawn.

Amendments Nos. 50 and 51 are related and may be discussed together.

I move amendment No. 50:

In page 81, between lines 37 and 38, to insert the following:

“(2) All retailers defined as relevant grocery goods undertakings must disclose their profits in the Irish market.”.

This is an important amendment not only for this legislation, but in the context of dealing with corporate companies. A whole range of multiples do not provide details of their sales and profits in this State. This is a huge disadvantage for policy development and taxation and is a disadvantage also in regard to the ability to create progressive rates and understanding the market power structure.

The fact that Tesco, Aldi and others do not indicate the turnover or profit they make here is wrong. In discussions I have had with many businesses recently, I have been made aware of the need for a progressive business rate. However, how can we apply a rate that takes profit into consideration if some of the key players in the market are unwilling to disclose their profits? I have probably mentioned this to the Minister a million times, but we cannot manage if we cannot measure. The fact we cannot measure exactly the turnover and profitability of these multiples is a major weakness in our ability to hold them to account, to manage them and to develop policy. If we are to have a transparent market in which firms and suppliers understand their true market power, it is important we get to the bottom of this issue. Why has this not happened before this?

I take a similar view on this. In regard to amendment No. 51, at a previous committee meeting the Minister attended and at which we conducted an investigation into the grocery market, we were treated to two days of fiction that would make Enid Blyton proud on the so-called difficulties of some of the operators in the Irish market. When they were pushed on profit levels and margins, they all went to ground and refused to provide that information. Given their dominance in terms of business and their importance in terms of being a service and a purchaser of Irish goods, their ability to evade any kind of scrutiny of their financial model, the margins they charge, their choice of some products over others and the way they treat suppliers is wrong.

As long as that culture of evasion exists and as long as it is facilitated by a lack of legislation, suppliers, customers and, in many cases, society at large is losing out and society is being harmed. I am referring specifically to policies with regard to the selling of alcoholic goods, which can be hidden, and many large multiples can get around any associated legislation because of the lack of scrutiny or detail on what they should provide in respect of their financial model. It is time now that we stood up to them as a country and put it to them that they must level the playing field for suppliers and, most important, for society.

The amendments from Deputy Tóibín and Deputy Calleary call for all retailers defined as relevant grocery goods undertakings to be obliged to disclose their profits in the Irish market. These proposed amendments are stand-alone provisions and are not related to the regulations that I, as Minister, may make to regulate certain practices in the grocery goods sector. As I have stated in the House previously, companies operating in Ireland are free to establish and organise themselves in the most suitable form to promote and run their businesses, provided that they comply fully with relevant national and EU legislation, including relevant legislation on the content of financial statements.

The requirements regarding the preparation of publication of the financial statements of limited companies and groups are determined by the first, fourth and seventh EU company law directives and by Regulation (EC) No. 1606/2002 and international financial reporting standards adopted by the EU under its provisions. These requirements are largely reflected in the Companies Act 1963, the Companies (Amendment) Act 1986 and the European Communities (Company: Group Accounts) Regulations, 1992, as amended. The equivalent requirements apply throughout the European Union. The fourth and seventh directives have been replaced by a new accounting directive, Directive No. 2013/34/EU, which is required to be transposed by July 2015. The requirements concerning the accounts of unlimited companies are governed by domestic legislation.

The extent to which profits are or are not disclosed is of general application and is not determined on the basis of the sector in which a company or group operates. The requirements under company law are essentially the same for companies or groups that operate supermarkets as for companies or groups active in any other sector of the economy. I consider that a disclosure regime targeting a specific sector could be viewed as disproportionate and discriminatory and could have negative consequences in terms of business costs and in attracting foreign direct investment. Thus, I am not in a position to accept the amendments on this issue.

From my perspective, the Minister's job is to manage the jobs, enterprise and innovation sector in a fair manner in the interests of the people and in a manner that allows people who want to work hard, invest, take risks, etc., to be properly and fairly compensated for those inputs into the economy. I also believe that to achieve that, information is necessary. I cannot think of any other manager anywhere who would wilfully not request key information that is relevant to his ability to manage his job and tasks. The profitability and turnover of these companies has consequences throughout the economy, not least in terms of employment rights and negotiations and engagements.

In this scenario we are discussing market power. The legislation is hung on the key issue that there is fair interaction of different market forces, including buyer and suppliers. A key part of that is information. The Minister cannot fully adjudicate on the engagement between Tesco or Aldi with suppliers if he cannot reasonably understand their levels of profit and turnover. To wilfully manage the whole sector in the blind - that is the reality at present - results in an inability to manage it properly. I still do not understand why exactly this has not happened as of yet and I urge the Minister to increase his ability to manage the sector and stand up for the interests of the public on this issue.

For as long as we give them the green light on this, and for as long as they are not held accountable for their financial model, which underpins the way they do business in this country, such companies will simply run a coach and four through this Bill, all of the associated provisions and all the grocery goods legislation. In his heart of hearts the Minister knows that. If it is a European stipulation that is stopping us, then Europe must be challenged. We cannot stand by any more and allow these organisations to use this leniency and the lacuna in the law relating to their financial model to do the damage that many of them are doing in our society as a whole.

The point of this legislation is to regulate abuses that arise in the sector. This is not to police prices or profit margins. This has arisen from a concern that people in a strong position can apply unfair rules in the way they deal with particular suppliers that are in a more vulnerable position. We are seeking to deal with that.

As I stated earlier, the Deputies are raising issues of what appropriate financial disclosures should apply. We cannot have financial disclosure obligations for one sector and not another. The financial disclosure obligations are set out in law and I have described them. Enterprises are obliged to meet their obligations under company and tax law. Those regulated under this provision will be obliged to meet their obligations in respect of unfair practices and fair contract terms. That is the limit of what this legislation does.

As I have stated already, if we start to introduce various alternative financial disclosure requirements from those that apply elsewhere in the European Union we would raise real issues in respect of how companies see themselves treated in different countries. We are in a competitive environment and we should comply with the level playing field provided by EU provisions in this area. They are fair and reasonable and they apply throughout the European Union. This Bill is trying to deal with what are potential abuses in the way in which smaller suppliers could be treated in respect of their practices.

Obviously there is a wider issue relating to people wishing to know how prices compare here and there, and that is a perfectly legitimate interest. On Second Stage we discussed several surveys conducted by the National Consumer Agency and individual players who examine prices hither and yon. It is perfectly valid to show people where value is and is not to be found. That is a legitimate way to improve information in the marketplace. However, requiring the publication of returns or profit margins in a particular sector is not what this Bill is about.

Is the Minister suggesting that any of the multiples would pull out of Ireland because they have to come clean and be honest and transparent about their levels of turnover and profit? For as long as I can remember there have been periods of major costs increases in the State. Ministers say from time to time that such and such a multiple is margin- or profit-harvesting. There is considerable evidence to show that some of these multiples, including Tesco, achieve a far higher margin in this State than in other areas. Again, it weakens the power of the consumer when that information is not to hand because the more multiples can hide with regard to their operations, the more power they have. Surely transparency is an important issue for the consumer, never mind the suppliers to those companies. Surely the Minister should be standing up for the consumer on these issues.

Reference was made to abuses of practice. The ultimate abuse is that we know who is responsible and they are able to do that because of the kind of money they are making in the market. We all know they are making big money but we do not know how much. That is what funds the abuse and their ability to abuse market share.

It strikes me as very odd that they must declare these figures in other European countries but not here.

We are seeking to deal with abuses that affect small suppliers in the supply chain where potentially unfair terms are being applied. We have seen those terms and are taking steps to regulate so that they cannot apply. The legislation does not seek to introduce new financial disclosures because one cannot establish financial disclosures for one sector and not another. That would be disproportionate. It is not a question of whether some grocery chain would pull out of the country but of saying that we will set up a system of financial disclosure that will not apply elsewhere. I do not believe Ireland should do that. Ireland should have a level playing pitch in respect of financial disclosure requirements. We should set laws that enterprises should comply with in terms of governance and taxation obligations. All of these obligations should be fair and apply equitably and equally across all sectors. We cannot start to introduce different rules for different sectors. We are seeking to protect those who might be vulnerable and make sure that practices that would render them vulnerable are not so.

There is plenty of work being done to protect consumers. My Department, through the National Consumer Agency and others, provides price comparisons, allows people to see what is going on in different areas and there are substantial differences in the charges for all sorts of products, including financial products. They are regulated. We do not seek to go beneath them to look for declarations of a company’s profitability in sectors where one insurer is offering terms on a different level to another insurer. We seek to inform consumers and let them make their own choices.

It is my duty to provide a level playing pitch within which enterprises can operate, set obligations that we will apply uniformly and deal with abuses where they arise. In this case that is what I am doing. An abuse has been identified in this supply chain and we are moving to deal with that.

Level playing fields are fine if they are fair. It is surely not the Government’s objective to level a playing field with an unfair system. Its objective must be to have a fair system and then level the playing field.

I do not suggest this should be limited to any one sector. Transparency, honesty and openness should apply in all sectors. We should seek to maximise the rights of consumers, suppliers and workers in this Bill over those of multiples.

I do not agree that we should seek to have a public declaration of the profit margins of every business in the country. That does not have anything to do with good management of fair market practice. We set up obligations under company law, competition law, tax law, planning law and expect companies to comply with them. I take my hat off to people who are profitable and successful. I do not expect them to have to publicise their profitability. We know exactly where that would lead. It would not encourage the creation or promotion of enterprise. It would be an unhealthy direction to take. One sets obligations and applies the rules fairly. That is what we seek to do, to address a very specific problem.

Amendment put:
The Committee divided: Tá, 2; Níl, 6.

  • Calleary, Dara.
  • Tóibín, Peadar.

Níl

  • Bruton, Richard.
  • Conaghan, Michael.
  • English, Damien.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
Amendment declared lost.

I move amendment No. 51:

In page 81, between lines 37 and 38, to insert the following:

“(2) All retailers defined as relevant grocery goods undertakings shall disclose their profits in the Irish market.”.

Amendment put and declared lost.

Amendments Nos. 52 and 66 are related and may be discussed together by agreement.

I move amendment No. 52:

In page 81, between lines 37 and 38, to insert the following:

“(2) The Minister, having regard to subsection (1) may, from time to time, give a direction that a retailer shall not sell grocery goods at a price that is less than the net invoice price of the goods.”.

Based on a previous discussion I know where this amendment is going. The Minister has emphasised that this Bill aims to protect against abuse of the supplier relationship. There is no doubt that below-cost selling is under way and that below the net invoice price selling is under way.

The Minister knows well that a turnip cannot be produced for five cent. Below-cost selling of alcohol is rampant, I suggest. Alcohol products are being used as magnets to draw in customers to large supermarkets. The manner in which alcohol is being used, its availability and the lack of regulation in the way in which it is being sold is causing so many other social consequences.

The Minister of State, Deputy Alex White is supposed to be working on a strategy around alcohol and alcohol abuse but one of the key problems is this sector. We have a chance here to do something about alcohol as well as looking at the supplier relationship and the abuse of that relationship. The Minister comes from an agricultural background and he knows it is not possible to produce a turnip for five cent, bring it to market, brand it and sell it. This is being allowed to happen and there is no follow-up, no interest. Everybody talks about it and then they move on to the next issue. It is also the case with the sale of pallets of beer. This amendment is to give protection to the primary producer and also societal protection from products that are being used by the large multiples to get people into their stores by using products that have far more consequences beyond the walls of that store.

Meath people are in the majority at this meeting so we had better be careful. A recent IPSOS-MRBI poll showed that nine out of ten respondents believe that legislation should be introduced to ensure that farmers receive a fair price. We are here as representatives of the people and that is what we should be seeking to do. Just three out of ten people were of the view that below-cost selling of vegetables was in the long-term interest of consumers. There is no doubt that a loss leader is made up by extra margins elsewhere in a store. In the round, the consumer does not benefit.

In my view an honest day's work deserves an honest wage and an honest product deserves an honest price. The two are interlinked because if the honest product does not get the honest price then the honest day's work does not get the honest wage. We should allow for proper, robust, healthy competition between firms but this should not mean the exploitation of suppliers. No matter which way this process is cut and diced, below-cost selling leads to the exploitation of sellers. I have been at a number of committee meetings where the cross-party general view was that with regard to alcohol and other products below-cost selling was leading to negative outputs for society in general and for suppliers. Here we have an opportunity to resolve that and I urge the Minister to resolve it once and for all.

The amendments call for powers for me as Minister to issue directions to retailers not to sell grocery goods at a price that is less than the new invoice price of the goods. The restrictive practice grocery order 1987, SI 142/87, prohibited below invoice price selling of certain goods rather than banning below-cost selling of those goods. In effect, the order allowed wholesalers and suppliers to determine minimum retail prices being charged to consumers, thereby seriously constraining competition in the grocery trade.

Since the repeal of that order in 2006, there is no statutory basis for me, as Minister for Jobs, Enterprise and Innovation, to make a minimum pricing order in any sector. The use of aggressive pricing strategies in any business is a legitimate marketing tool and the normal outcome of the competitive process. Low-cost and below-cost selling by a retailer is not in itself an offence, unless it involves an abuse of a dominant position. A determination on whether a retailer is abusing a dominant marketplace position would necessitate a comprehensive investigation by the Competition Authority, the independent statutory body responsible for enforcing competition law in the State. Complaints of an alleged anti-competitive practice should be referred to the authority.

I do not accept that there are grounds for the reintroduction of such a restrictive measure; therefore, I am not in a position to accept the proposed amendments. Deputy Dara Calleary gave alcohol as an example. However, as he indicated, the Department of Health is developing proposals in that area and it is doing so not as a matter of market operation but as a matter of public health policy. The nature of markets is such that one cannot ensure every business will thrive and receive a reasonable return for its effort. Businesses rise and fall and processes change and it is not the role of the State to set prices. Our role is to set fair rules within which competition can operate, which is what we are seeking to do. We are not seeking to fix a price for a particular product but to ensure that where an aggressive price strategy is pursued by a retailer, as is its entitlement, it is not done by abusing the supplier's contract terms. The Bill provides the correct balance between the various interests in the marketplace. For these reasons, I cannot accept the amendments brought forward by the Deputies.

I realise that the functioning of the market is very important, but if that functioning is having a damaging impact on society, it must be restrained. It is not appropriate for the Minister to pass the ball to the Department of Health on this issue. If that Department comes back and states below-cost selling of alcohol must be outlawed, which it might do, it will fall back on the Minister to implement it. He has a chance to send a statement from the Department of Jobs, Enterprise and Innovation that we are doing something about this. The multiples are hardly quaking in their boots at the prospect of being investigated by the new authority, as poorly resourced as it is. They have a raft of lawyers and many ways of getting around the legislation. We, therefore, need to make sure the Bill is resource-proof in that context.

We have seen instances of where suppliers are being abused. There may be no written evidence, but we know it is happening in terms of the pressure being put on people, small suppliers in particular. The dominant sellers are putting suppliers in a situation where a dependency arises and becomes part of their business model. The supplier is obliged to provide product at certain prices, pay for shelf space and do all of the other stuff we know is going on. Dealing with below-cost selling in this legislation would send a signal that such practices would not be tolerated.

I do not agree with the Deputy that we should be involved in price setting across the retail trade. He is suggesting wholesalers would write an invoice price and that it would become the price. If that were happening in another situation, he would, rightly, be describing it as a cartel where the retailer had no obligation but to accept the price dictated by the supplier.

Where is the protection for the small supplier? The Minister's Department has an innovation remit. It should be encouraging small suppliers and the employment they provide but, instead, it is not giving them any protection. They are being walked over and the Department is allowing this to continue.

The Deputy is proposing to restore a provision which his own leader, as Minister for Enterprise, Trade and Employment at the time, removed. He removed that provision because it was operating as what used to be called resale price maintenance and was an anti-competitive practice. In other words, it allowed suppliers to set a price below which nobody else could sell, thereby allowing them, in effect, to write their own profit margins.

What I am proposing is allowing them to-----

I ask the Deputy to allow me to finish. The situation I have outlined was and is not desirable. We must have a situation where more efficient businesses can compete on price and adopt aggressive price strategies if they so choose. All of the issues to which the Deputy referred such as suppliers being obliged to pay for shelf space and so on will have to be regulated, which is what we are doing in the Bill. It seeks to protect suppliers within this process, but it is not seeking to revert to provisions which the Deputy's own leader in government removed because they were not delivering benefits for the consumer. All these provisions served to do was to allow certain parts of the supply chain to set prices for themselves. The judgment taken by the Government at the time was that this was not in the interests of consumers. Therefore, the power then available under legislation to set minimum prices was removed. We are seeking to ensure there are fair practices within the marketplace and have set out detailed provisions in that regard. We are not trying to set prices or say what a price should be in the marketplace. That is not the purpose of any Department.

In the Minister's ideal world everybody can compete on price. What we have, however, is not ideal. Instead, we have a number of large multiples using their size and market power which we cannot measure because we do not know what their profits are to abuse the price relationship between supplier and retailer. There is no sense in a small business owner trying to negotiate prices with a grower when the large multiple next door has the might of its organisation to do the same. Of course, it will get a better deal. It is not a case of the multiple being more efficient but of the smaller operator not having the same resources.

In regard to alcohol, I reiterate that there absolutely is a public health demand for a restriction on its use as a loss leader. We have seen what has happened since it became possible to sell alcohol at any price and in an uncontrolled environment, which is what is happening in supermarkets throughout the country. I will come back to this issue on Report Stage, even if I have to specify products. It is time the Minister's Department took the lead on a public health issue instead of waiting to see what changes a health strategy might propose. The Minister's ideal world in which everybody competes on price and the more efficient businesses secure the better price is not reflective of reality. The multiples have evaded efforts to discover information on their operations in this country or have some light shone on their financial figures and they are using these figures to abuse their dominance. They are running the show and calling the shots and this legislation will do nothing to change it.

My Department's remit covers jobs, enterprise and innovation. If we are to introduce public health provisions in respect of the sale of alcohol - I agree that there is a legitimate demand for such because cheap prices do represent a threat to public health - it has to be articulated by the Department of Health, which is what is happening. That Department is taking a view, for very sound public health reasons, on the proper price and distribution methods, issues to do with advertising and a range of other provisions in regard to the sale of alcohol. It is doing so in the proper way, by setting out the public health basis for it and presenting its findings to those who understand public health and are qualified to make judgments on public health policy. That is what is happening and it is the right way to proceed. It is not for a Department like mine to form judgments about public health issues or others outside its remit.

The Department of Health is very alert to the Deputy's specific concerns and I understand it will be introducing a comprehensive strategy to facilitate the putting in place of a range of measures designed to try to contain the level of alcohol abuse which, of course, is a serious problem. The strategy to which I refer has been set out and the Department has signalled that the legislation necessary to underpin it will be introduced. That is the way the Government is approaching the matter.

The Deputy's amendment seeks to use legislation relating to competition in the marketplace to pursue objectives which do not come within the remit of my Department. While I may be sympathetic to his views, alcohol abuse should be dealt with by the competent authorities and that is what is happening.

The WHO has compiled a report which indicates that Ireland has the second or third worst rate of binge drinking in the world. Perhaps it might be useful to take a steer from the Department of Health during the process in which we are engaged and use the legislation before us to try, as is our duty, to solve the massive problem of alcohol abuse.

Amendment put:
The Committee divided: Tá, 2; Níl, 6.

  • Calleary, Dara.
  • Tóibín, Peadar.

Níl

  • Bruton, Richard.
  • Conaghan, Michael.
  • English, Damien.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lyons, John.
Amendment declared lost.

Before we move on, I must point out that there are quite a few amendments to be dealt with and we have 40 minutes remaining to do so. We have been liberal in the time spent dealing with amendments and there has been a good deal of repetition. I am pointing that out for the benefit of the members. I have no problem coming back to deal with the remaining amendments on another day, but today's meeting will conclude in 40 minutes and it would be nice to conclude Committee Stage today. There has been a good deal of repetition. It is up to members and there is no problem coming back to deal with it another day but ideally it would be great if we could conclude Committee Stage today.

Amendments Nos. 53 and 54 are related and will be discussed together.

I move amendment No. 53:

In page 81, between lines 37 and 38, to insert the following:

"(2) Subject to a grocery goods undertaking choosing to enter into a contract, relevant grocery goods undertakings shall have a contract with a grocery goods undertaking for the sale or supply of grocery goods.".

The purpose of this amendment is to ensure that anybody who wants a contract has the legal protection of getting a contract. Unfortunately, it seems to be practice that in many of these relationships the purchaser and supplier do not necessarily have a contract. The relationship develops informally and then it gets bad. If a supplier decides not to have a contract, that is a case of the supplier waiving its right, but it would be agreed and accepted that a contract would exist unless otherwise stated by the supplier.

I wish to indicate that I would like to raise on Report Stage the issue of franchisees. I would like to make sure that an individual who operates a small firm as an independent but who is tied into a greater franchise is not covered by the onerous tasks that may be involved, because I do not think that is in the spirit of the legislation.

With regard to the specific amendment, the logic is that a contract is there to protect those at both ends. It should be the case that where that protection is deemed necessary by a supplier, where there is undue pressure, such protection is afforded to them.

These two amendments essentially propose the same thing, albeit in a different manner. Both propose that where a grocery goods undertaking chooses to enter into a contract with a relevant grocery goods undertaking the latter must have a contract with the former for the supply or sale of goods. I note that there is a difference in the legal framing between the amendments tabled by Deputies Tóibín and Calleary. Deputy Tóibín's seeks to include the provision under the list of activities on which regulations foreseen by the Bill will be drawn up, while Deputy Calleary's proposal seeks to make it obligatory outside of the regulations as a stand-alone measure.

The provisions of the Bill as currently drafted state in section 63B(2)(a) that regulations may specify the form of the contract entered into by the parties. While I do not want to pre-empt what the final regulations will contain, this section is pivotal to ensuring that situations such as unilateral amendments to terms, retrospective change to terms, etc., are covered by the regulations. Without a written contract in place it would appear to be impossible to enforce any regulations on issues such as unilateral amendments to terms or retrospective changes of terms. It is worth noting that the issue of written contracts is a core part of the UK code of practice for this very reason.

As regards the suggestion that grocery goods undertakings could decide not to have a contract, this would have a practical effect in that the grocery goods undertaking would have no protection under the regulations. I am not sure if this is what was intended by the Deputies in their proposal.

Finally, there is always the possibility that the effect of the proposal would be that grocery goods undertakings are coerced into opting out of contracts by relevant grocery goods undertakings. This would leave grocery goods undertakings with no protection under the regulations. For all of the above reasons, I am not convinced that this is a good idea, and thus my initial reaction is that I would not be in a position to accept the amendments proposed. However, I am aware that certain sectors would see this as a major issue and, as such, I am prepared to reflect on this before Report Stage.

How stands the amendment?

I will withdraw it if the Minister intends to reflect on the issue for Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 54:

In page 81, between lines 39 and 40, to insert the following:

"(a) subject to a grocery goods undertaking choosing to enter into a contract, relevant grocery goods undertaking shall have a contract with a grocery goods undertaking for the sale or supply of grocery goods,".

How stands the amendment?

The same is the case with regard to this amendment.

Amendment, by leave, withdrawn.

Amendments Nos. 55 and 59 are related and will be discussed together.

I move amendment No. 55:

In page 81, between lines 39 and 40, to insert the following:

"(a) specify that payments for grocery goods supplied to relevant grocery goods undertakings to be made within 30 days,".

We have all heard from suppliers who do not get paid for upwards of 60 or indeed 90 days in the supply chain, and there is evidence of this. This amendment seeks to give them the protection of being paid within 30 days, which is a basic right for everybody who submits an invoice.

A key element of the engagement between suppliers and buyers is the length of time for which credit is available. There is no doubt in my mind that a key pressure point for a supplier is the issue of terms. We have had the banks and many of the agencies dealing with credit in here and we know that credit flow and the supply of funds and working capital in businesses are a major danger at present, more so now than was ever the case in the deeper times of the recession. Functioning, profitable and healthy businesses are being pushed to the edge due to the fact that they cannot manage their credit. I expect that the Government would favour such an amendment.

The purpose the provisions of the Bill relating to the grocery goods sector and the regulations I will make in due course on foot of those enabling provisions was to regulate certain practices in the grocery goods sector.

On the issue of payment, the Bill clearly sets out at section 63B(2)(p) that the regulations may specify the manner and timeframe in which payment for grocery goods supplied to relevant grocery goods undertakings are to be made. I believe that the issue of the timeframe for payment should be considered in the context of any regulations rather than in primary legislation, to allow for more flexibility, if required, in any statutory instrument. Payments are also covered by prompt payment legislation, and this must be factored into any regulations. Setting out a period of 30 days in primary legislation may be too rigid compared to making regulations and thus, as the text of any regulation is not finalised or agreed, I believe that these amendments are neither required nor appropriate in this Bill.

When does the Minister envisage the regulations will be available? Will it be before Report Stage?

I beg your pardon?

Will we have sight of the regulations, even a draft copy of them, before Report Stage?

I do not think so.

The danger is that, as Opposition TDs whose job it is to hold the Government to account and to scrutinise, we are being asked to go along with this on a wing and a prayer, or to buy a pig in a poke, but in reality, legislation is the place for this type of protection to be provided. It is not wrong to expect that people would get paid in time for what they provide. It is onerous that people would be asked to spend 60 or, in some cases, 90 days waiting for payment for their product. It retards the development of businesses if they cannot get paid in time. It has a dampening effect on the economy in general, especially the indigenous economy. It stops the growth of businesses if they cannot get paid in time and puts many operators out of business.

I must express serious concerns about the regulations, given their importance to the Bill. We will not even see a draft copy of them before the Bill passes through the Dáil. We have had a debate today but we will not have a chance to debate what effectively is the fourth leg of the chair in terms of the regulations and their importance to the Bill. It puts all the talk about Dáil reform into real perspective.

I have indicated clearly that I will bring the regulations back to the committee, but what we are agreeing at this point is the broad principles under which regulations would be drawn up. The reason we are providing for regulations is to allow the flexibility to use this framework, and that is what I will do. I have indicated that I will bring the draft regulations back to the committee but I do not think we should be seeking to put into primary legislation things that will only unnecessarily restrict the scope of regulations and try to put into an item of primary legislation what is properly for the regulation period.

How stands the amendment?

I wish to press it.

Amendment put and declared lost.

I move amendment No. 56:

In page 81, line 41, to delete "to a" and substitute "to, or the purchase or receipt of goods from, a".

This amendment allows regulations to be applied to the sale or supply of grocery goods to and from a relevant grocery goods undertaking to cater for the possibility of making regulations to cover, for example, large suppliers and small retailers and not just large retailers and small suppliers or producers.

Amendment agreed to.

I move amendment No. 57:

In page 82, line 2, to delete “circumstances” and substitute “ways”.

This is an amendment to bring greater clarification to the text.

Amendment agreed to.

Amendments Nos. 58 and 65 are related and may be discussed together by agreement.

I move amendment No. 58:

In page 82, between lines 6 and 7, to insert the following:

“(c) specify Retention of Title for goods delivered until such time full payment is received,”.

The amendment is similar to the thinking behind the Construction Contracts Act in that the supplier and producer would retain title to the goods until such time as they are fully paid. There is a lacuna at the moment which weakens the position and the amendment seeks to strengthen it.

Irish statute law and EU law recognise simple retention of title clauses of the kind set out in the amendment. The courts have also upheld such clauses. It is one thing for the law to uphold certain forms of retention of title clause freely agreed by contracting parties but quite another for it to insert a mandatory title retention clause into commercial contracts.

To the best of my knowledge, no other jurisdiction has introduced a legislative provision of the kind. The aim of the Bill’s provisions on grocery goods is to achieve a proper balance in the commercial relations between supplier and retailer but that should not be done by introducing a potential imbalance into the relationship between the supplier, retailer and other parties. The proposed amendment would affect the interests of third parties, including the Revenue Commissioners, employees and unpaid service providers who have no equivalent option to take back services that have been provided by reducing the pool of assets available for distribution to other creditors of an insolvent buyer and, effectively, permitting an unpaid seller to jump the queue of creditors.

The potential for a retention of title clause to lead to inequity between creditors has in fact led a number of jurisdictions, including the United States, Australia and New Zealand to treat such clauses as a form of security interest against third parties that must be registered by the seller. The Law Reform Commission proposed a similar system of registration and other conditions regulating retention of title clauses, although its recommendations were not implemented.

In its comprehensive report from 2011 on the legislation governing the sale of goods, the sales law review group also concluded that because of their impact on third parties who had no say in the contract, any reform of retention of title clauses had to be considered in the context of a broader reform of the law relating to personal property security interests. Although I have some sympathy with the aim behind the amendment I am not in a position to accept it.

Given that this Bill is based on trying to clear the playing pitch, all of the responses suggest a fairy tale situation in which everyone gets on with each other and the big multiples treat suppliers with care and attention and it is all happy days on the farm. We know that is not the case. Ultimately, the person that produces the product should have more rights than the Revenue Commissioners because the Revenue Commissioners are probably chasing them as well for payment they did not get. I will not press the amendment but I will return to it on Report Stage. At some time, some country will say to the big multiples that the laws will be different and that it will give the small guy a chance. Why should we not be that country?

Following on from that global attitude, there is a very strong view at the moment that the huge multiples have turnovers as great as nation-states and currently wield enormous power. Little by little nation-states are starting to withdraw from proper management of such organisations because the relationship between companies and states are becoming unbalanced. It seems to me a basic concept that if I own a product and I sell it that I own it until I am paid for it, yet the Minister is shying away from the logic that the property is mine until someone pays for it and he refuses to put it in the legislation. It would provide security and confidence to suppliers that they have some level of leverage in the process if such a measure were in place. It seems that the Government is more confident, secure and comfortable siding with the power of large multiples.

The counter-argument is well made, that the amendment would affect the interests of third parties. The Revenue Commissioners act on behalf of the State. Other interests that are looked after are employees and unpaid service providers. They deserve to be protected in the case of a large company getting into financial difficulty and not being able to make payment. This is a much more complex issue than the little guy versus the big guy. This has an effect through a fairly complex web of relationships in a supply chain that has others involved.

I do not see the compelling argument in the line taken by the Deputies. Other countries have recognised the situation as well. I do not see the big gain the amendment would achieve other than in the situation of a company getting into severe problems and then it would erase all the other knock-on effects that are not as straightforward as the Deputies suggest. I do not think this is an area we should seek to stray into. What we are trying to do is regulate the relationships between suppliers and the grocery undertakings in the normal course of business. It is a much wider issue that the Deputies seek to raise and it is not appropriate to the legislation.

Amendment, by leave, withdrawn.
Amendment No. 59 not moved.

I move amendment No. 60:

In page 82, line 33, to delete “supplier” and substitute “supplier or retailer”.

The amendment extends the provision to cover retailers as well as other relevant goods undertakings, for example, suppliers and-or distributors.

Amendment agreed to.

I move amendment No. 61:

In page 83, to delete lines 22 to 24 and substitute the following:

“(i) to secure and retain shelf-space, to get better positioning, or to get an increase in the allocation of shelf-space, for the grocery goods of that supplier, or”.

The desire is to copperfasten the end to "hello money". It is a stronger formulation of words for the Minister to put in place. The logic speaks for itself.

I will examine the matter and come back to it on Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 62:

In page 83, between lines 27 and 28, to insert the following:

“(iii) in respect of requiring a supplier to obtain any goods or services from a third party from whom the relevant grocery goods undertaking receives payment for this arrangement,”.

The aim of the amendment is to prohibit contracts that compel suppliers to incur costs using third party suppliers specified by the purchaser. Again, it is one of those pinch-points where suppliers can have undue pressure put on them.

Again, while it is adequately addressed in the Bill I am prepared to reflect on the issue and come back to the Deputy on Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 63:

In page 83, between lines 27 and 28, to insert the following:

“(iii) directly related to the value or volume of goods traded,”.

The intention is to ban contracts that include long-term agreements which provide for the payment by suppliers of substantial off-invoice rebates at the end of the trading period. My understanding is that all of the rebates should be properly discussed and detailed from the start. My experience is that a lot of suppliers who enter agreements with purchasers find that the engagement in which they are involved starts to change. On that basis I urge the Minister to accept the amendment.

Again, the belief is that we have adequately covered the issue but given what the Deputy has said we will look again at the matter and revert to him on Report Stage.

Amendment, by leave, withdrawn.

Amendments Nos. 67 to 69, inclusive, are consequential on amendment No. 64, therefore, they may be discussed together by agreement.

I move amendment No. 64:

In page 84, between lines 16 and 17, to insert the following:

“(3) Subject to this section, when making regulations under this section, the Minister may prescribe one or more classes (whether retailers, suppliers or wholesalers) of relevant grocery goods undertakings or grocery goods undertakings to which one or more of the regulations shall apply.”.

The amendment proposes that the regulations may be limited to one or more type of relevant grocery goods undertakings if so desired rather than applying them to all such undertakings every time regulations are made.

That was not clear from the existing text. Amendments Nos. 67 to 69, inclusive, are consequential amendments on foot of amendment No. 64.

Amendment agreed to.

Amendment No. 65 has been discussed already with amendment No. 58. Is the amendment being pressed?

No; we have had a detailed debate on it.

Amendment No. 65 not moved.

Amendment No. 66 in the name of Deputy Peadar Tóibín has been discussed already with amendment No. 52. Is the amendment being pressed?

It is the same as the previous amendment.

Amendment No. 66 not moved.

I move amendment No. 67:

In page 84, line 17, to delete “(3) Regulations” and substitute “(4) Regulations”.

Amendment agreed to.

I move amendment No. 68:

In page 84, line 20, to delete “(4) The” and substitute “(5) The”.

Amendment agreed to.

I move amendment No. 69:

In page 84, to delete line 25 and substitute the following:

“(6) Guidelines issued under subsection (5) shall—”.

Amendment agreed to.

Amendment No. 70 was ruled out of order. Does the Deputy want to raise the issue before we deal with the section?

Yes. In terms of the notion of it being a charge on the State, we should be able to discuss that and make the call ourselves. However, that is house law. Issues will continue to arise between suppliers and multiples and other organisations regarding contracts and the various interpretations of the provisions of this legislation. Some resolution mechanism should be put in place that preferably avoid people having to go to the courts, a lawyer or a solicitor. Some consideration should be given to that.

My view is that the Competition Consumer Protection Commission is the independent body and is the ideal one to do it. It has the expertise. It is regularly dealing with market interaction of this nature, the balance of powers in a competitive market, the interest of consumers and so on. It is the best agency to deal with it. Colleagues from across the corridor might say it is another quango but we have a body that has the expertise. Why would we set up another body?

Amendment No. 70 not moved.

I move amendment No. 71:

In page 85, to delete lines 7 to 9.

This is an important amendment. There is a number of grounds in the legislation on which the commission can decide not to investigate a complaint and one of them is that there were alternative means of redress available to the complainant. That is far too vague. It does not outline those alternatives and it is a very broad area which a commission can seek not to investigate. My concern is not just that the commission would desire not to investigate a complaint but because of resources, the latitude in which the commission would function would shrink very quickly and, therefore, by default this might be used to explain that shrinkage.

This proposed amendment seeks the deletion of the provision which provides that where there is or was available to the complainant an alternative and satisfactory means of redress regarding the conduct complained of the commission may decide not to investigate a complaint. This is just one of four grounds for a decision not to continue with a complaint, the others being on the grounds of frivolous or vexatious complaints, trivial subject matter or the complaint occurred at too remote a time to justify an investigation.

While it is not possible to investigate the volume of complaints that might be made in the future, it is vital that the commission is not obliged to investigate every complaint. Equally, to be effective it will undoubtedly have to prioritise its resources to enforce all of its statutory functions. I believe that where there is or was an alternative and satisfactory means of redress regarding the conduct complained of, it would be reasonable for the commission to choose in the round not to pursue the investigation of an individual complaint. The complainant would be advised of the reasons for such a course of action, thus, I am not in a position to accept this amendment.

I disagree with the Minister on that. It is necessary that we tighten up that space because it creates a weakness in the legislation. I am pressing the amendment.

Amendment put and declared lost.

I move amendment No. 72:

In page 85, between lines 22 and 23, to insert the following:

“(7) The Commission must provide for anonymity and confidentiality of a complainant who reports a breach of the Regulations, and a complainant who waives anonymity must be protected from discrimination, disadvantage or unfair treatment as a result of the complaint subject to natural justice being afforded to the accused.”.

This is another important amendment. Given that the attention of the Oireachtas has been gripped by very valuable work carried out by whistleblowers throughout society but most centrally in the justice sector, confidentiality is an important element of getting to the truth. There is no doubt that a large number of suppliers believe that when they come to the table with real grievances they will be blacklisted and therefore will have fewer opportunities to engage in trade with organisations to protect these individuals. That barrier to getting to the heart of improper use of power in the market is a logical step to allow for that. We are not looking to allow for vexatious reporting to the commission. The commission is well able to identify vexatious reporting but it is important that some level of protection for individuals is afforded. If the individual wants to make themselves known in the process that should be allowed also but in that case they must be protected from discrimination, disadvantage and unfair treatment into the future.

The way in which the Bill deals with that achieves the right balance in terms of what the Deputy seeks. The commission will have authority under section 63C(2) to initiate an investigation of a relevant goods undertaking on foot of receiving a complaint but it can also do it on its own initiative. This alternative allows us to investigate independently of the complaint being made. Equally, the provision to issue a contravention notice making breaches of these orders an offence is intended to allow the commission to enforce regulations without having to base its actions on complaints. In other words, it can take on something without revealing the identity of the complainant. I am sure the commission will seek to protect the identity of persons who supply it with information in the first instance in the course of commencing its investigation, and section 23 contains a provision on unauthorised disclosure of confidential information. However, in terms of someone who gets to an enforcement stage, if the case does not stand on the investigative powers the right of the accused to details of his or her accuser is a core tenet of our Constitution and legal system. While I understand the rationale for what the Deputy is proposing, we have provided the best protection possible to allow the commission investigate while protecting the anonymity of the complainant but if it stands and falls on the evidence of the complainant, it cannot pursue without that complaint.

I agree with the Minister that some part of what we are seeking to do is already in the Bill, and what we are seeking to do is not that far removed from the Bill as drafted. I agree that if someone makes a case against one, by the time it gets to court one has a right to know the identity of that individual. That is the reason the amendment states that when it reaches that stage, protections against discrimination and disadvantage can be dealt with. The amendment might need to be reworded, and the Minister might come back to it on Report Stage.

The Deputy's wording makes it compulsory whereas what we have provided in the Bill will ensure the anonymity.

However, it cannot be an absolute imperative because it then ultimately takes from the enforcement in some circumstances. The amendment is probably unnecessary in that what is being attempted here is the best that can be done while respecting the constitutional legal system. The commission will seek to protect the identity of persons and to respect their views but I do not think members should be setting up a compulsion to so do within the legislation.

I will press the amendment.

Amendment put and declared lost.
Section 76, as amended, agreed to.
Sections 77 and 78 agreed to.
NEW SECTIONS

I move amendment No. 73:

In page 88, between lines 29 and 30, to insert the following:

“Amendment of Central Bank Act 1942

79. The Central Bank Act 1942 is amended—

(a) in section 2, by deleting the definition of “Agency”,

(b) in section 5A, (amended by section 14 of the Central Bank Reform Act 2010)—

(i) by substituting “the Competition and Consumer Protection Commission” for “the Agency” in each place where it occurs,

(ii) by substituting the following subsection for subsection (5):

“(5) The functions of the Competition and Consumer Protection Commission referred to in subsection (4) are the following functions, namely, functions under—

(a) subsections (1), (5), (6) and (8) of section 8 of the Competition and Consumer Protection Act 2014 in relation to—

(i) sections 41 to 56 (other than section 50) of the Consumer Protection Act 2007, and

(ii) the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 and 2000,

(b) sections 33, 34 and 35 of the Competition and Consumer Protection Act 2014, and

(c) sections 71, 72, 73, 75, 81, 82, 84, 86, 88 and 90 of the Consumer Protection Act 2007.”,

(iii) in subsection (6), by inserting “and the Competition and Consumer Protection Act 2014” after “Consumer Protection Act 2007”,

(iv) in subsection (7)(a), by substituting “under section 17 of the Competition and Consumer Protection Act 2014” for “under section 21 of the Consumer Protection Act 2007”,

(v) in subsection (8), by substituting “sections 80 and 85 of the Consumer Protection Act 2007 and section 31 of the Competition and Consumer Protection Act 2014” for “sections 80, 85 and 87 of the Consumer Protection Act 2007”,

(vi) in subsection (9), by inserting “or the Competition and Consumer Protection Act 2014” after “Consumer Protection Act 2007” and by substituting “under section 17 of the Competition and Consumer Protection Act 2014” for “under section 21 of that Act”,

(c) in section 5C (inserted by section 14 of the Central Bank Reform Act 2010), by substituting the following subsection for subsection (3):

“(3) Subject to section 33AK, if the Competition and Consumer Protection Commission is of the opinion that information obtained by the Bank pursuant to subsections (1) and (2) is relevant to the exercise of that Commission’s functions under section 8(3)(j) of the Competition and Consumer Protection Act 2014, the Bank shall provide the requested information to the Commission at the Commission’s request.”,

(d) in section 33AK—

(i) in subsection (3)(a), by deleting paragraph (iva), and

(ii) in subsection (5), by substituting the following paragraph for paragraph (al):

“(al) to the Competition and Consumer Protection Commission, if the confidential information is required for the performance of the Commission’s functions, or”,

(e) in section 61E, by deleting paragraph (d) of subsection (1),

(f) in section 61H, by substituting the following paragraph for paragraph (c) of subsection (4):

“(c) the Competition and Consumer Protection Commission;”,

and

(g) in Part 1 of Schedule 2, by inserting the following item after item 42:

43 No.___of 2014 Competition and Consumer Protection Act 2014 Parts 1 and 2 (other than section 36)

This is a long amendment. It is consequent on the repeal of relevant sections of the Consumer Protection Act 2007, where the Central Bank has powers relating to consumer protection. The effect of the new section is to maintain the current position relating to the Central Bank. Both the Central Bank and Department of Finance were consulted in this matter and have indicated their agreement to this necessary amendment.

Amendment agreed to.

I move amendment No. 74:

In page 88, between lines 29 and 30, to insert the following:

“Amendment of Personal Injuries Assessment Board Act 2003

80. Section 56 of the Personal Injuries Assessment Board Act 2003 is amended by substituting the following subsection for subsection (6):

“(6) The chief executive, and a person nominated for such appointment by the chairperson of the Competition and Consumer Protection Commission, shall each be a member of the Board.”.”.

At present, the chief executive officer of the National Consumer Agency is a standing member of the board of the Personal Injuries Assessment Board in order to represent consumer interests. As the new competition and consumer protection commission will not have a chief executive officer, an amendment by way of a new section is required to allow a nominee of the chairperson of the commission to sit on the board of the Personal Injuries Assessment Board.

Amendment agreed to.
Sections 79 to 81, inclusive, agreed to.
SCHEDULE 1
Question proposed: "That Schedule 1 be Schedule 1 to the Bill."

I will revert on Report Stage with revised Schedules on the Consumer Protection Act 2007.

Question put and agreed to.
TITLE

I move amendment No. 75:

In page 7, line 9, after “2002,” to insert “the Central Bank Act 1942, the Personal Injuries Assessment Board Act 2003,”.

The amendments being proposed to the Central Bank Act 1942 and to the Personal Injuries Assessment Board Act 2003 are consequent to the establishment of the new competition and consumer protection commission and necessitate an amendment to the Long Title of the Bill to reflect changes to those Acts.

Amendment agreed to.
Title, as amended, agreed to.

I thank all members for their co-operation to date in respect of the Bill's passage. I also thank the Minister and his officials for their attendance and assistance.

Bill reported with amendments.
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