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Competition Authority.

Dáil Éireann Debate, Thursday - 11 March 2004

Thursday, 11 March 2004

Questions (2)

Brendan Howlin

Question:

2 Mr. Howlin asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on the recent annual report of the Competition Authority; her views on whether the authority’s target of prosecuting one cartel a year is adequate in view of the widespread public concerns regarding the extent to which consumers are being exploited by anti-competitive behaviour; and if she will make a statement on the matter. [8148/04]

View answer

Oral answers (10 contributions)

I welcome the Competition Authority's annual report for 2003, which has been laid before the Houses of the Oireachtas and which is currently being examined. The report demonstrates the authority's wide range of activities in the areas of competition law enforcement, controlling mergers and acquisitions, undertaking studies and promoting competition generally.

Regarding the authority's expectation to prosecute one cartel per year, I understand this takes account of the authority's experience to date in investigating cartels both at national and international level. Cartels are conspiratorial by nature, making them difficult to detect and prosecute successfully. It should be borne in mind, therefore, that undertaking the prosecution of a cartel case is an arduous and time-consuming process which involves the investment of significant legal and economic resources.

For example, I am aware that the Director of Public Prosecutions has commenced the prosecution of a particular cartel, the investigation of which began more than two years ago. More than 50 summonses have been issued in 11 District Courts to companies and individuals and the authority does not view the number of defendants in this case or the length of time that it has taken to get the case to court as unusual in cartel investigations.

Achieving a successful outcome to any prosecution brought is of greater importance than the number of prosecutions initiated. As we have seen from developments in other countries, a single successful prosecution of unlawful business activity can have a very wholesome effect on potential wrongdoing by others.

In view of the harm caused by cartels to consumers, the authority has identified the pursuit of cartels as a priority and to this end it introduced a cartel immunity programme in December 2001 in conjunction with the Director of Public Prosecutions. I understand the programme has been operating successfully.

Furthermore, the authority's law enforcement role is not just confined to cartel investigations. I note that the authority's annual report for 2003 shows a considerable increase in overall enforcement of competition law compared with previous years. Last year was the first in which the authority operated with the full range of its current powers and functions under the Competition Act 2002. The report shows that the authority has made a good start across the whole range of its responsibilities and I look forward to further success in the years ahead.

I am taken aback by the complacent response from the Minister of State.

The Deputy should not be taken aback.

I suppose not. If one issue resonates across the land it is the perception of rip-off Ireland. The Minister of State says the prime agent of the State, the Competition Authority, is doing a grand job, that all is well and that we can sit back because the proof of the pudding is in the eating. That is an extraordinary attitude.

The report referred to states that out of 200 complaints received 174 were closed following an initial review and only five proceeded to full investigation. In effect only one case in 40 was investigated and the vast majority of complains were dismissed without any follow-up. In the face of widespread public concern about rip-off Ireland, is the Minister of State content with that?

The chairman's foreword to the report effectively states that the enforcement target set for the authority is the same as was achieved in 1998 and 1999 despite the fact that staff numbers have been increased by vote of the House by86%, from 21 to 39, with two additional Garda detective sergeants. The budget has virtually doubled and, as the Minister of State rightly said, the legislative powers have also been beefed up to enable effective enforcement. Is the Minister of State saying that notwithstanding the new legislation, new resources and new staff, an enforcement target at that level is acceptable to him?

Yes, I am satisfied. The authority's target is based on a number of criteria it has set down for itself. As the Deputy is aware, the Competition Act 2002 came into operation in July 2002. Last year was the first full year of its operation. Based on the authority's experience from the first full year of the Act's operation, on previous and current cartel investigations, from the first year with full staff complement, from international experience of investigating cartels, from its relationship with the Garda Bureau of Fraud Investigation and the Office of the Director of Public Prosecutions, the authority concluded that a target of one major cartel investigation per year was appropriate.

This is a highly complex and time-consuming exercise. The evidential standard for indictable offences is onerously high with a beyond reasonable doubt burden of proof on the prosecutor. Following investigation, the authority is required to prepare a file for the DPP after which the preparation of a book of evidence can take several months. Following a decision by the DPP to proceed with the prosecution, the authority assists and works with the DPP, the chief prosecution solicitor, legal counsel and the Garda Síochána in getting a case ready for trial.

By way of illustration of the extent and size of individual cartel investigations in the coming months, I refer to the prosecution of a case arising from a Competition Authority investigation of a cartel. This investigation commenced over two years ago. In excess of 50 summonses have been issued in 11 different court districts to companies and individuals to answer charges being brought by the DPP. The trial will involve the largest number of defendants collectively in one case in the history of the State.

How many successful prosecutions have there been?

It is not about the number of investigations; it is about the depth and effort made to break these notorious cartels.

I deliberately kept my question short but the Minister of State went on and on. He said the proof of the pudding is in the number of prosecutions. How many successful prosecutions against cartels have there been to date?

I do not have that information, but I will make it available to the Deputy.

On a short piece of paper.

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