Dáil Éireann díospóireacht -
Tuesday, 30 Apr 1991

Vol. 407 No. 6

Competition Bill, 1991: Second Stage.

Minister for Industry and Commerce (Mr. O'Malley):

I move: "That the Bill be now read a Second Time."

The Competition Bill, 1991, represents a central instrument in this Government's programme to revitalise the economy, to encourage growth and thereby address the most pressing problem facing us all — unemployment.

It will bring about a fundamental change in the basic structure of the market place by introducing into it a statutorily protected requirement for competition. Competition is fundamental to a growing economy. It is the life blood of an efficient market — a dynamic regulator without which everyone suffers. When competition is present, resources are allocated efficiently, innovation and enterprise prosper, and consumer welfare is safeguarded. Without competition firms may become dominant and bleed the economy. Without competition cosy cartels can emerge and share markets to the detriment of consumers and suppliers alike. Without competition a dominant market player can abuse his position to prevent new players entering the market place or to undermine successful companies. Without competition stagnation can infect a firm, an industry and the economy as a whole.

The objective of this Bill is to ensure that we have a properly competitive economy. I am convinced that this can be achieved by constantly exposing all Irish firms to the stimulus of competition. Without such a stimulus I believe that our economy will continue to under-perform, that we will be doomed to the economic periphery of Europe and that unemployment will remain endemic.

Competition is required throughout the economy in production and in distribution, in manufacturing and in services. All firms act as both suppliers and consumers in different market places. If a firm has to pay too high a price for its professional services or its raw materials due to some cosy arrangement up the line, then the goods and services that it produces will carry unnecessary costs. Such additional costs can and do cascade through an economy making domestic products uncompetitive.

The aim of this legislation is to address this problem at the core and prevent these additional costs infecting our economy and reducing our competitiveness. By addressing this fundamental weakness in our economy I am convinced that Irish firms will increase their international competitiveness and not only withstand the pressures of the Single Market but prosper within it.

Competition rules of the type provided for in this Bill are a characteristic of dynamic prosperous economies. It is by no accident that economies such as those of the USA and Germany are so successful. They recognise the importance of the market as the machine for economic growth and the need to protect it by ensuring it is well oiled by competition. The two key items of legislation in the United States to protect competition are the Sherman and the Clayton Acts which were enacted 101 and 77 years ago, respectively. This legislation and this policy have withstood the test of time and their impact is reflected today in the extraordinarily prolonged strength of the US economy.

The beneficial impact of competition has been recognised from the outset in the European Community also and market protection mechanisms are incorporated in the Treaty of Rome through Articles 85 and 86.

In contrast, the impact of failure to protect the market place can be seen throughout the world where it has led to stagnation and exploitation. The free market economies of certain South American countries have shown the long term damage of such failure where the basic fabric of their societies has been eroded and significant comparative advantages dissipated.

The Programme for Government includes a commitment to the introduction of legislation to give effect in domestic law to provisions similar to Articles 85 and 86 of the Treaty of Rome after the Fair Trade Commission presented a report to Government. This Bill delivers on that commitment.

The Bill is a significant part of the effort being made by the Government to prepare Irish companies for the increased competition which will follow on the completion of the Internal Market in 1992.

The rules contained in Articles 85 and 86 already apply to those sectors of the economy which are engaged in trade at Community level. There is no reason any sector should be sheltered from the discipline which these competition rules create. It is interesting to note that those sectors of the economy which have been exposed to competition are the most dynamic and have made a real contribution to economic growth.

The argument in favour of competition is not an academic one but rather is founded in the need to see the greatest possible degree of sustainable economic growth alongside consumer welfare. These twin aims are complementary. It is possible to artificially stimulate economic growth but this always imposes a cost either directly on the consumer through loss of welfare or indirectly through the tax system.

In its study of competition law, published at the same time as this Bill, the Fair Trade Commission in discussing the specific benefits which might be expected to flow to Ireland from introducing a more active competition policy stated, in Chapter 3:

Much of domestic activity may have been insulated from competition up to now. This is the case in particular with services. The development of full competition in most sectors within the EC is very likely. By acting quickly to bring about competition at domestic level, it is possible that Irish enterprises will improve their prospects of survival and development in the future;

Because so much of economic activity has not been subject to competition law, it might be expected that the benefits of changing the law will be very significant in the early years and will give a substantial boost to the economy;

The stimulus, and the experience of competition in the domestic market should better equip Irish enterprises and, particularly, Irish management to participate actively in world markets. One of the features of the successful exporting economies, Japan and Germany, is the intense competition in their home markets.

I agree with this assessment of the commission.

The only ones who should fear competition are the inefficient and those who conspire to deprive the consumer of the benefits to which he is entitled. I hold no brief for either of these groups and I trust that no one else in the House does.

It is of significance that the Programme for Economic and Social Progress recognises that “a modern efficient market economy requires a satisfactory legal framework in the area of... competition policy”. Specifically, the programme points out that the application of the same competition rules as already apply to those engaged in trade at Community level, will stimulate competition in the remaining sectors of the economy, so that the traded sectors will not have to bear the costs imposed by anti-competitive practices in more sheltered local businesses.

Existing legislation is based on the concept of what is called a control of abuse system. It does not ban any particular activity until it has been investigated. Such investigations have been undertaken on a sector by sector basis and have led to the making of restrictive practices orders for particular sectors. However, large areas of the economy have never been subject to investigation much less to action. This type of fragmented and piecemeal approach needs to be radically changed. Anti-competitive practices and agreements and abuse of dominant positions that operate in domestic business activity need to be outlawed as they are at community level under the Treaty of Rome. In order to provide a comprehensive, but not confusing, system the former Acts and orders are being replaced.

I will not detail here the numerous and time consuming steps that are usually involved in taking action against anti-competitive practices under existing legislation. I have done so in this House on a number of occasions in the past and Deputies, no doubt, will be familiar with them at this stage. It is clear that the difficulties and delays are considerable.

The Fair Trade Commission have made clear their support for the application of the principles of Articles 85 and 86 to domestic business. However, the commission's report took an approach to administration and implementation that was very closely based on the European Community model. While the philosophy behind Articles 85 and 86 is fully acceptable to me I consider that administration need not follow the Community model but should be adapted to our own circumstances. Indeed given the differences between the role assigned to the European Commission under the Treaties and to various organs by our Constitution, it would be impossible to replicate the Treaty system exactly.

Given that the central idea of the Bill is drawn from the Treaty of Rome, I cannot describe what is proposed as totally novel. Indeed, a number of proposals have been introduced in this House which had the same objective as this Bill. In the preparation of the Bill I have examined these earlier proposals. There is a necessity in legislating to ensure that any new system works and I have tried to take account of the comments made about earlier ideas. To the extent that there is novelty in the Bill it relates to its approach to administration and implementation. This can be seen as the detail of the Bill is examined.

Part II of the Bill, comprising sections 4 to 9, is the heart of the Bill. Section 4, in line with Article 85 of the Treaty of Rome, prohibits and makes void anti-competitive agreements, arrangements and practices. A list of examples is given that includes price fixing, sharing markets and price discrimination. This list is not exhaustive. The section allows exemptions from this prohibition to be given by the competition Authority. Exemptions can only be given if the benefits of the agreement outweigh the negative effects of the anti-competitive elements in it. An essential feature is that consumers must have a fair share of the resulting benefit. In no circumstances can an exemption be given if it would allow the possibility of the elimination of competition in respect of a substantial part of the products or services in question.

Section 5, which is based on Article 86 of the Treaty, prohibits the abuse of a dominant position in trade in the State or a substantial part of it. Unlike section 4, there is no possibility of an exemption being granted against this prohibition. The Bill will not allow, under any circumstances, the abuse of a dominant position. I think I need to say something in detail here about what is meant by a dominant position. I am prompted to do so by what I have seen, particularly in recent times, of over casual and careless use of the term. The term "dominant" has been used by people to describe the position of companies that are not dominant but at that moment are disliked by the speaker or writer.

"Dominant position" is not defined in the Treaty of Rome and no definition is offered in this Bill. It is not possible, in advance, to set precise criteria such as percentage market share that would allow dominant positions to be defined for all markets. Very few markets are so static as to allow that sort of analysis. Although not defined in the Treaty the concept is clear.

In a number of cases the European Court of Justice has addressed this issue and defined a dominant position as an economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained in the relevant market by giving it the power to behave, to an appreciable extent, independently of its competitors, customers and ultimately of its consumers. This description clearly brings out the point that it is the issue of relationships within a market that are central to determining whether there is dominance.

Finally, I want it to be clear that it is the abuse of a dominant position, and not the existence of such a position that is prohibited here. A dominant position can exist so long as it is not abused. Behaviour in the market is the issue being addressed. It is quite clear from this that there is no conflict between competition policy as expressed in the Bill and the industrial policy which the Government continue to promote.

The enforcement mechanisms proposed in the Bill are designed to ensure effective action without imposing undue burdens in compliance or enforcement. The system will be transparent and objective. Section 6 allows any person who suffers loss in consequence of a breach of sections 4 or 5 a right to damages or an injunction to restrain further damage. It offers an advantage over existing arrangements because it gives a direct remedy to those aggrieved and does not require action by any official authority.

The competition Authority, which is dealt with in Part III of, and in the Schedule to the Bill, will decide whether exemptions in respect of restrictive agreements should be granted. The procedures to be followed are set out in sections 7 and 8. In order to ensure transparency these sections provide that decisions on applications for exemptions made by the Authority will be published. Their decisions will be open to review by the High Court as provided in section 9.

Actions for enforcement, whether initiated by private individuals under section 6 or by the Minister for Industry and Commerce, will be decided on by the courts.

Section 10 establishes a new competition authority, whose principal functions I have already outlined. The Fair Trade Commission will be abolished. Section 11 allows the Authority to carry out studies at the Minister's request. Section 12 requires the Authority to report to the Minister for Industry and Commerce each year and that he publish these reports.

The concept of control of monopolies, with mechanical and artificial criteria for determining when they exist, as provided in the Mergers, Take-overs and Monopolies (Control) Act, 1978, will be replaced by a ban on the abuse of a dominant position. Section 14 sets out how this will be done if there is a fundamental structural problem arising. This provision is supplementary to Part II, which concentrates on behaviour, and I expect it to be used only in the gravest of cases, if at all. The corresponding provisions of the 1978 Act were never used.

The introduction of these clear concepts and simple mechanisms will make much of our previous restrictive practices legislation redundant. These Acts and Orders can be repealed. This is provided for in section 22.

The Bill will also amend some of the provisions of the Mergers, Take-overs and Monopolies (Control) Act, 1978. Experience with its operation, particularly in recent years, has demonstrated the need for certain changes. These changes are principally in the area of timing of notifications, the supply of information to the Minister for Industry and Commerce and enforceability. Sections 15 and 16 deal with these points.

The criteria against which a merger is to be assessed by the competition Authority are set out in a clearer fashion in section 17 than was the case in the Schedule to the 1978 Act. A change will also be made in respect of publication. Under the 1978 Act reports of the Fair Trade Commission on merger cases have not been published. Reports on such cases by the competition Authority will be published, but confidential business information will not be discolsed. This will ensure that assessment of significant merger proposals is carried out in a transparent way.

The 1978 Act will be amended, by section 19, to take account of the EC Regulation on the Control of Concentrations. This Regulation, No. 4064/89, which has been in force since 21 September 1990 gives the EC Commission exclusive jurisdiction, with some rare exceptions, over very large crossborder mergers in the Community.

Parts I and V of the Bill contain standard provisions in relation to citation, commencement, repeals, expenses and deal with authorised officers. The Schedule, as I mentioned earlier, sets out the detail of the competition Authority's composition, rules and powers.

To the extent that there has been public comment on the Bill since its publication, such comments have very largely been positive. I welcome this response and I have no doubt that it will be reflected in contributions to the debate here. I hope that a positive response will speed the passage of the legislation which I hope, with everyone's co-operation, to be completed by the summer.

The question may be posed whether this Bill will solve all competition problems. The temptation is to claim excessive credit and answer "yes", but that is unrealistic. The truth is that it will never be possible to deal with all competition problems to the satisfaction of everyone. However, this Bill so improves the present unsatisfactory system that I have no hesitation in promoting it. Its coverage should be universal as far as principles are concerned. The Bill is relatively short and sets out as clearly as possible how the essential objective of introducing a modern concept of competition rules is being proposed. I will consider any proposals for refinement of the system envisaged in the Bill but its thrust and the essential principles it contains should not be altered.

Accordingly, I commend the Bill to the House.

Mr. Barry:

We welcome any Bill that improves competition and benefits industry, jobs and the consumer. As regards the publication of Bills on two occasions in the last fortnight I have seen references in the newspapers which resulted, presumably, from press releases from the Minister's Department about proposed legislation, including this Bill and the one that was published last Friday. I received a copy of this Bill two days after I read about it in the papers — I see Deputy Rabbitte nodding in agreement. I presume it was for the benefit of the conference on Saturday that the Minister published the two Bills at this time. Opposition Deputies did not receive copies of the Bills until after members of the press had received them. I would have thought that Deputies were entitled to receive them at least at the same time as the media — in fact before the media.

Mr. O'Malley:

On a point of order, I would intervene, with your permission, Sir, to assure Deputy Barry that this Bill and the other Bill, were in the hands of Deputies before I said anything publicly about them.

Mr. Barry:

That is not true.

Mr. O'Malley:

In my capacity as a Deputy, I received the Bill in the post four hours before I gave a press conference on it.

Mr. Barry:

I suggest to the Minister that the Bill——

Mr. O'Malley:

If the post to Cork is slow, neither I nor my Department should be held responsible for that, but the Bills were posted on the previous night and I made a point of that. I checked with the Dáil office to see if they were distributed to Deputies before anything publicly was said about them.

Mr. Barry:

The Bill arrived at my house at 8.45 a.m. yesterday but the press conference conducted by the Minister was reported in Saturday's papers. I do not know where the fault lies but I would have thought that the Minister would have the courtesy to ensure——

Mr. O'Malley:

The Bill of which the Deputy speaks was posted in Dublin on Thursday night. If it was not delivered in Cork until Monday morning I regret that but it is outside my control. Perhaps the Deputy would take up the matter with An Post.

Acting Chairman (Mr. M. Barrett):

The Minister's assurances must be accepted. We cannot have a court of law here.

Mr. Barry:

I am not arguing with the Minister's assurances; I am saying that a little courtesy on his part would ensure that, given the fact that everybody does not live in Dublin, Deputies, particularly those who have responsibility for responding to these Bills, receive Bills before the media. It would not require any great organisation but just a little courtesy.

Mr. Molloy:

We were all in Cork at the weekend.

Acting Chairman:

The Deputy should be allowed continue with his speech.

Mr. Barry:

The Deputies could have brought it down with them and I would have had it on Saturday but they did not even have the courtesy to do that. I wonder would Deputy Quill like to tell us when she received the Bill.

Miss Quill:

I was about to say that I received it on Friday morning.

Mr. Barry:

My Copy did not arrive in the post until Monday morning.

Mr. Rabbitte:

It seems as if Government backbenchers received it before the rest of us.

(Interruptions.)

Acting Chairman:

Deputy, you are out of order. Please continue with your speech.

Mr. Barry:

I am making a request for a little courtesy towards Deputies, particularly Deputies who are Front Bench spokesmen for their parties, that they might be given the Bill at least a few hours before the press conference is held. I do not think that would require a great deal of organisation by the Minister's office.

Mr. Taylor:

It seems that Government Deputies have a dominant position established here.

Mr. Rabbitte:

As long as they do not abuse it——

Acting Chairman:

The Deputy should continue with his speech.

Mr. Barry:

The Minister has talked about his intention to introduce a Competition Bill for some time, both in office and before coming to office. As he said in his speech, it is part of the Programme for Government set out by his party and the Fianna Fáil Party. He has finally produced the Bill which we are now discussing. Given the length of time it has taken to produce the Bill I would have expected something better than what is essentially a scissors and paste job. The Bill which has been eventually produced is an unhappy combination of existing legislation from both national and European sources. It extracts two Articles from the Treaty of Rome namely, Articles 85 and 86, and a number of sections from the Restrictive Practices Act, 1972, and combines them — although the Minister has said the entire article is not included in either case — into what I think is a potentially disastrous cocktail for Irish business and consequently for the consumers.

What was expected from the Minister was a detailed and comprehensive approach to competition. The need to legislate in this area is an important step towards preparing Irish industry for the challenge of the single market which is now just 18 months away. Unfortunately, the pressure of party political considerations and the conference that was held in Cork over the weekend have influenced the timing of this Bill more than it should. What should have influenced the Minister is the interests of the Irish business community and of course the Irish consumers. Some sectors of industry have already indicated their disappointment with the lack of consultation in this area. While it is true that, as the Minister says, there is an initial welcome in the industry for a competition Bill, I have spoken to a number of trade associations and professional institutions since the Bill was published, and indeed I have been approached by others, all of whom have complained that neither the Minister nor his Department made any effort to elicit their views before the legislation was drafted. The result is a Bill that does more for the legal profession than for Irish industry or indeed for the Irish consumers. I have spoken to trade associations, auditors and accountants' associations and solicitors, none of whom has been asked to give their views on this very important legislation.

I want to make clear the Fine Gael position in this area. Fine Gael favour a market-orientated economy. We wish to see the promotion of a competitive philisophy. I have no argument with what the Minister set out in the first and second pages of his script in that regard. I fully subscribe to it, but I do not think this Bill fulfils what is set out. Such a philosophy would be of benefit to the consumers, business enterprises, employees and the economy generally. Interference with market forces should be minimal, be it State interference or indeed interference by various interest groups such as businesses collaborating with one another to negate market forces or indeed groups of businesses or trade unions who are able to exploit their positions of power.

That would lead me to talk about what happened last week in the ESB and the abuse of their position of power by one of the trade unions involved in that dispute. I am not one of those people who rush in to say that because one such instance occurs the monopoly position of the ESB should be dismantled, but this whole question must be looked at in a calmer atmosphere than that which prevailed last week. We should try to ensure that industry and consequently consumers and jobs are protected from the actions of a very small minority of people who abuse their position, and if that means dismantling the ESB and dividing its generation and distribution into two different companies, that must be considered. In the light of this legislation and whatever assurances can be given about supplies in the future we might find a ready response but in a calmer atmosphere than that which prevails at the moment.

Fine Gael support in principle the concept of this Competition Bill and, as I have said, subscribe very strongly to the tone of the Minister's speech and to what he has set out in the first two pages. From some of his speeches it appears that he thinks that business people in all industries are engaged in a huge conspiracy to abuse their position of power, to rob the consumer and provide them with bad value and inferior goods. I have more experience of the business community than many people in this House and 95 per cent of them are honest and want to conduct their business in a way that will benefit themselves, their employees and the consumers. However as in the case of Dáil Members, solicitors, doctors and people in other sectors of the community, 5 per cent do not behave in an honourable way. The business community, by and large, are just as honest as any other sector of society even though sometimes the tone used in this House — and outside it — gives the impression that all business people are conspiring to break the law for their own benefit.

Fine Gael support the concept of a Competition Bill which would promote competition and eliminate factors that interfere with market forces. For this reason Fine Gael supported and called for the introduction of a competition practice which would ensure the operation of an effective, efficient and, above all, vigilant marketplace. We will not be refusing a Second Reading of the Bill but, as I was told that the Minister was receptive to amendments when the Companies Bill was before the House, I hope he will table amendments on Committee Stage which will vastly improve this legislation.

The Bill, as I said, is a disappointing and inadequate response to the need for an active competition policy. The Minister missed a great opportunity but, more worrying still, he succeeded in creating unease and uncertainty in relation to the contents of the Bill and in the manner he introduced it. I am sure the officials in his Department will convey to him the concern expressed to them, since the Bill was published, about many matters in it. Indeed, there was a letter from the Minister in this morning's newspapers correcting what he perceived was a wrong interpretation of the Bill. Even in the short space of time since the Bill was published someone eminently qualified to understand it was not correct in his interpretation of it, according to the Minister.

The fact that it has taken the Minister so long to get a Competition Bill through the Government suggests that the Coalition relationship is a bit more strained than we are led to believe and that the winning streak about which we were told last Saturday night is not the reality because it is becoming increasingly clear that the Progressive Democrats are becoming powerless to influence legislation, given how long this has taken. The Bill merely plagiarises existing legislation but, in so doing, it shows no appreciation of the way business works or of the environment in which it must operate.

The Bill suggests that little or no thought has been given to the impact it will have on the vast majority of business people who are trying to operate in a difficult climate. Far from promoting competition, the Bill, is potentially creating a layer of regulatory networks to be negotiated by businesses. However, business in this country is far too regulated and we are facing into a period of significant changes internationally including the progress towards the completion of the Single European Market, the concluding stages of a round of the GATT negotiations, the changing relationships within eastern Europe and between European states, which all bring uncertainty for business and, consequently, for employment. This Bill is adding to that uncertainty.

The Bill lacks clarity in its objectives and content and there is a great deal of uncertainty about its operation. While the Minister was struggling to get it through Cabinet he could have used the time by publishing a White Paper on competition policy which would have allowed everybody to have their say in regard to this legislation. However, he did not do this in the intervening two years. He could then have initiated responses and submissions before finally formulating a Bill, which would have had widespread support from the people who will be working within its guidelines.

The Minister should use this opportunity to introduce a Bill covering competition, restrictive practices, mergers, monopolies and takeovers, as well as consumer protection. By lifting two Articles from the Treaty of Rome and incorporating them in the Bill the Minister seems to have forgotten that Articles 85 and 86 are only part of the Treaty and that there are other treaties by which they are governed which are set in the context of the Treaties of Rome. In isolation — as they are here — many questions arise with which I will deal later.

The Bill states that its objective is to prohibit the prevention, restriction and distortion of competition and the abuse of a dominant position in trade within the State. It does not tell us to what end all this is being done. The Bill's Long Title tells us very little. Is it to promote, as the Treaty of Rome states, the free movement of goods and services within Ireland? If so, we would applaud it. Is it to make markets more efficient and to avoid the waste of resources inherent in inefficient markets? Again, if that is the objective, we would applaud it. What is the Minister's view of the aims of the Bill with regard to promotion of competition? Perhaps if we were made aware of his analysis of the needs in this area, we might be better able to interpret the practical application of the Bill. As it is, it is simply more expensive bureaucracy for the business people who will have to operate it and, eventually, for the consumer.

Will the Minister clarify the position of the Bill in regard to agriculture? It is not clear whether it applies to agriculture because the Treaty of Rome does not. Does it apply to public and statutory bodies and to the public sector generally? They are not listed as being excluded, therefore, we must assume it applies to them. If it is to apply to the public sector there needs to be a complete overhaul of many anti-competitive practices in that sector including the ESB, what was CIE — in its three constituent parts, particularly Dublin Bus — Bord na Móna and Bord Gáis Éireann. Will all these bodies be included in the Bill? If so, under section 14 (6) they may already be breaking the spirit if not the letter of the Bill because, presumably, they will apply for one of the licences. If it will not apply to the public sector it will once again make private sector enterprises the whipping boy by subjecting them to different rules from those which apply to agencies, bodies and authorities which are associated with the Government.

There is an omission in this Bill which is in the Treaties of Rome; under Articles 85 and 86 there must be an abuse of a dominant position. I will read an explanation from a book called EEC Competition Policy in the Single Market. Page 21 lists the elements necessary for application of Article 86 as follows:

(c) There must be an abuse of the dominant position, in the sense that advantage is taken of the dominant position which causes injury to third parties.

Examples are:

(i) charging unfair purchase or selling prices. Prices which are unfairly high will be to the detriment of consumers, while those which are unfairly low (below cost) may be aimed at eliminating weaker competitors, who do not have the power to match such prices for any length of time.

That is not in the Bill before the House. Does the Minister intend that it should be because the EC Treaty, which the Minister says is necessary to open up markets and should be applied inside Ireland, sees that as being an abuse of a dominant position; yet it appears from this Bill that the Minister does not.

The quotation continues:

(ii) discriminatory prices, e.g. charging customer A more than customer B for exactly the same transaction, thereby placing customer A at a competitive disadvantage;

(iii) refusal to sell to a customer without valid, objective reasons;

(iv) attempts to hold on to customers, for example, by granting fidelity rebates;

(v) acquisitions of competing undertakings, thereby affecting the competitive structure within the common market.

That has happened in this country before when people attained a dominant position. An example of that in the last few months was where one meat company attempted to buy another, giving it a dominant position. That certainly would appear to be prohibited under the EC Regulations. Whether it is prohibited under this or not is not quite clear yet.

Does the Bill apply to tendering procedures operated by the public sector or collusive tendering by firms seeking business in the public sector? That is important. Does the Bill apply to these engaged in dumping products, that is, selling at a lower cost? That is a similar point to one I read out. If there is below cost selling it falls outside the definition of being engaged in trade for gain. Is this Bill meant to deal with the dumping of goods from outside the State? If not, are we still subject to the EC anti-dumping regulation which, as we know from experience, takes so long to operate effectively.

Is this Bill to apply to all undertakings and enterprises or will there be some minimal cut-off point which would exclude those below a certain size, as is operated under EC Regulations 85 and 86? Those regulations apply to undertakings above 200 million ECUs which is the last figure I heard. That is about £150 million and I presume that would be applied on a ratio; it might be 1 per cent of our contribution to the EC and that would be an undertaking of, perhaps, £1.5 million here. Are undertakings of £1.5 million, or some other figure, to be excluded from this? If they are to be excluded is it the particular contract or agreement to that value that will be excluded or is it the firm's total turnover or capital size? What are the criteria that will determine the size of the company that will be excluded? Is the total company excluded in one instance? If the company is above that statutory level in an agreement that involves that amount of money, is that agreement to be excluded?

These are points that should be in the Bill and are not in it. If parts of the agreement are found to fall within the meaning of a prohibited agreement under section 4 will the agreement be void or just the parts prohibited by that section? That is not clear from the Bill.

What about existing agreements? Are they to be declared void retrospectively? How will existing commitments be enforced if they are declared void in this way if the Bill, as the Minister wishes, becomes law by the summer? There are, in business, such things as long term agreements, maybe stretching over a period of five or seven years, under which firms undertaken to buy a quantity of goods at a certain price over a long period. These benefit the purchaser and the seller in as much as they allow the seller of the goods to organise his factory for a long period by accepting a lower price for his goods and ensures to the person he is supplying a range of goods at a certain price over a long period. If that is declared void by the Bill, what will happen to that agreement? Are the parties to that agreement liable in law to be sued? Is the seller likely to be sued by the customer for not supplying the goods? These points need to be cleared up.

The Minister proposes to grant licences which will permit the doing of acts which would otherwise be prohibited and void under section 4. Licences are anathema and they should never be used in any connection. We have had plenty of experiences to confirm that. The Minister referred in his speech to exemption but the word used in the Bill is "licences". Exemptions are granted by the EC under Articles 85 and 86. Yet, in spite of the examples we have here of licences assuming capital value, we produce a Bill that seeks to issue more licences. We should look at taxi licences, haulier licences, publican's licences. They have assumed capital values where there should never be any value at all.

A licence is something that permits one to do something and it should not assume a value itself. Yet, in spite of having these examples of how licences have assumed a monetary value, the Minister has gone back to the old licence system which has proved disastrous here. Certainly, a licence should not be part of a Bill that seeks to promote competition. It is the opposite to competition. It would be better to give exemptions, clearly outlined, than to use licences to grant exemptions. Exemptions should be defined in an objective manner with clear criteria. Obviously, to lift law from the European Community and put it into Irish law, would be difficult but this is one area where the Minister should do so. The body of experience that has been built up since the signing of the treaties in the European Community regarding exemptions in this area can be applied here as well, but introducing licences is totally the wrong approach and should not have been contemplated at all. Exemptions should not be given in the form of a licence which is peculiar to an undertaking or to a agreement. The whole mechanism of operating a licence system requires administration, documentation and time. We have plenty of experience in this country that they do not work. They are not in the interests of competition. Nor are they in the interests of the consumer because the cost of the licence then becomes built into the cost of the product being produced under the licence and the end result may be a restriction rather than an expansion of business practices. Unfortunately for the party that set out to break the mould, they seem to have lost their way and have ended up merely refashioning the mould.

Section 4 (5) is a far cry from open government. That subsection says that the competition Authority, before granting a licence or issuing a certificate, may invite "any Minister of the Government concerned with the matter" to offer observations. Why are members of the public who might have an interest not invited to make submissions? Why are trades associations, lawyers and accountants not asked for their observations? This, again, is something that does not happen in the European Community. They put an advertisement in the papers inviting observations from those who may be concerned before they grant a licence; they set out precisely who is looking for this exemption, why they are looking for it and to whom it will apply and then they invite submissions and objections to it. Only a Minister of the Government who is concerned in the matter may apply. While section 7 (5) says the Authority may accept such observations or submissions from persons claiming to be interested, I think there should be provision to invite such submissions rather than just accepting them when they are made. It is a defeat in the Bill that the competition Authority will not be inviting comments or submissions from members of the public and interested bodies.

In order to be effective in its operation, competition requires vigilant consumers and competitors and for consumers to be vigilant they need to be well informed and aware of what is going on. Furthermore, in subsection (6) the general public are only to be informed of the granting of a licence or a certificate when it is a fait accompli. The competition Authority are obliged to say publicly that they have granted such a licence when they decide to do it but only post facto. There is no machinery evident in the Bill to allow the public or interested competitors object to or give their observations on any application that is made. In subsection (7) the Authority may, at the request of the Minister, study, analyse and report on various issues. That again is a change. Why is this being tightened up again? Why are the competition Authority not entitled to initiate investigations? The Authority should be given explicit powers to initiate their own studies and investigations. They should not have to wait for the Minister to ask them to do something.

Legislation should not be put through this House on the basis of personalities. We should ensure that any legislation we pass will be applicable to conditions which may obtain when none of us are Members of this House. It is not inconceivable that in years to come a matter which needs to be investigated cannot be investigated because the Minister, whoever he is, deliberately chose not to ask the competition Authority to initiate an investigation. That matter could not be investigated and the Authority would have no power to do so. That would be wrong.

This applies also to section 14 which raises concerns regarding the overall direction in which the Minister seeks to go in the operation of this Bill. It is not the dominant position of an undertaking which is the problem. The Minister went to some lengths to define the term "dominant position". The IDA, who worked directly with the Minister, constantly underline the need for Irish companies to expand and develop. They constantly say that we need Irish companies who can dominate Irish markets so that they can use that as a springboard to go abroad; we need to build up large Irish undertakings who almost, by definition, will be dominant in these markets. In order to compete in the European and broader markets Irish companies should at least hold that dominant position in the Irish market.

I want to refer to a letter in today's The Irish Times from the Minister in which he criticises an article written last week on this Bill by — I do not want to mention this name — the Director of Competition Policy of the Confederation of Irish Industry. The Minister in his letter accuses the director or writing a factually inaccurate and misleading article on the Bill. This article bears out my point that the Bill is defective. If the Director of Competition Policy of the Confederation of Irish Industry, who presumably is some sort of authority on this area, states that the Bill is defective then the Bill is not clear, it does not serve the purpose for which it was drafted and is not clear in its intention. Having read both the article and the Minister's letter I have to say that I agree with the man who wrote the article, in other words; I do not think the article was inaccurate. In the second paragraph of his letter the Minister states:

Mr. Cregan states that "setting up a Competition Policy and requiring prior notification of agreements" will be particularly onerous in an economy like Ireland with so many small businesses. What the Bill proposes is that agreements "which have as their object or effect the prevention, restriction or distortion of competition in trade" are prohibited and void. Notification arises only where agreements of this type exist and the parties involved seek a licence (effectively an exemption from the prohibition or voiding of the agreement) from the Competition Authority.

I notice that the Minister is moving away from the word "licence" towards the word "exemption" in his letter. I hope this is what he is doing.

I do not know how companies can decide, except by employing lawyers and accountants, whether an agreement is against the Bill. The Minister states further in his letter that the article suggests that the only remedy the Bill contains to deal with the abuse of a dominant position is provided for in section 14. He said that section 6 is more appropriate. However, section 6 deals with appeals to the High Court. The Bill does not differentiate between very small shops and big firms such as Cement Roadstone or Carrolls — they will all have to go to the High Court. No small shopkeeper can afford to go to the High Court to have his case heard — it could cost up to £10,000 or £20,000.

The attitude adopted in section 14 is different from the attitude in the European Community. Section 14 provides:

(1) Where the Minister is of the opinion that there is, contrary to section 5, an abuse of a dominant position he may request the Authority to carry out an investigation and the Authority shall comply with the request.

(2) Where the Authority holds an investigation pursuant to a request under subsection (1) it shall report thereon to the Minister and the report shall state whether in the opinion of the Authority——

(a) a dominant position exists, and

(b) if it does, whether that dominant position is being abused.

(3) The Minister, having considered a report of the Authority under subsection (2), may, if the interests of the common good so warrant, after consultation with any other Minister of the Government concerned by order either——

(a) prohibit the continuance of the dominant position except on conditions specified in the order...

He may prohibit the continuance of the dominant position but he does not have to eliminate the abuse. This is the opposite of what is proposed in the EC. In fact, the European Community makes the point that it does not wish to remove the dominant position, it is the abuse it is concerned about. Yet the Minister provides in this Bill that he may prohibit the dominant position and not the abuse. As I said earlier, this is a serious defect in the Bill and one which I will seek to change.

Mr. O'Malley:

Will the Deputy read the rest of the subsection which states "except on conditions specified in the order"? One of the conditions is that he stops abusing it.

Mr. Barry:

Why did the Minister not say that? If the Minister brings in an amendment on Committee Stage which says precisely that, I will accept it. However, as the section is presently worded a court, who will hear the appeal, may interpret is as meaning that the dominant position must be removed. If the Minister brings in an amendment on Committee Stage which provides for the point I am making I will support it. The Director of Competition Policy of the Confederation of Irish Industry, who is more qualified than I in this area has the same impression about this section as I have. We may all be out of step but I ask the Minister to look at this point before Committee Stage.

Mr. O'Malley:

I hope the Deputy will look at it also.

Mr. Barry:

This approach contradicts sound industrial policy in this area. Our priority must be to build strong, Irish located firms capable of competing internationally. This must be the foundation of our industrial policy. This issue is one which a White Paper would have brought out into the open for discussion.

The final paragraph of the Minister's letter clearly shows that he misinterpreted Mr. Cregan's article. He said:

Finally any suggestion that the Bill is incompatible with industrial policy is unsustainable as would be any suggestion that an industry should be allowed abuse a dominant position in the Irish market because it is competing in Europe.

I find this distressing attitude among some Members of this House. What Mr. Cregan actually said was that our national industrial policy, correctly, is to help Irish companies grow to such a scale in the Irish market that they can achieve the economies of scale required to be competitive in the European market. Yet the Minister seems to have inadvertently interpreted Mr. Cregan's statement in his letter this morning.

Sections 21 and 22 deal with the powers of authorised officers. A point arises here over section 21 (1) (a). Reference is made to entering and inspecting premises at which activity, in connection with the organisation or assistance of persons engaged in business, is going on. They do not say that in Europe; they refer to the firm concerned. Section 21 refers to entering and inspecting premises at which activity, in connection with the organisation or assistance of persons engaged in business, is going on. Does that mean that the lawyers' and accountants' offices can be inspected, as they are people who are assisting in the activity of the business? Why is there a difference between what happens in Europe and what happens here, even though we are being told that we are being prepared for Europe? This is capable of being interpreted so that lawyers' and accountants' offices can be inspected and can be entered by these officers to obtain evidence. That is not the case in Europe where only the premises being investigated can be entered. What implications will this have for privileged communications between solicitors and their clients? If a man has an agreement in his solicitor's office how can confidentiality between solicitor and client be maintained in those circumstances?

A further issue arises in connection with whether people have a right to withhold self-incriminating evidence. What is the Minister's attitude to that? Is it proposed that this Authority would have powers beyond the powers already held in other offices of the State?

The section dealing with membership of the Authority is out of date. It has been virtually lifted from the 1972 Act with the best parts of it being left out. Section 4(2) says that a member of the Authority ceases to be a member on being nominated for the Seanad or on being elected to the Houses of the Oireachtas or the European Parliament. Why are people nominated to the Seanad treated differently? A person nominated for the Seanad must cease to be a member of the Authority whereas a person nominated for the Dáil only ceases to be a member of the Authority on being elected. Under the 1972 Act if one became a member of the Seanad or the Dáil one had to give up one's seat on the Authority. In other legislation in the past few years if a person is nominated for the Seanad one must give up one's seat on the Authority. There might have been some rationale behind this when it was thought up some years ago, but I do not see it.

Mr. O'Malley:

I do not want to interrupt the Deputy but he really gets himself wound up into knots about nothing, because he does not read what is in question, or take it into account. The reference is to a member of the Authority being nominated as a member of Seanad Éireann is what it says. In many instances Members of Seanad Éireann are never elected as members but are nominated as Members. One cannot refer to them as being elected or say that they will only be disqualified——

Mr. Barry:

The Minister would want to look at this again because I know it is a fact that if one gets a nomination for the Seanad without being elected one must resign from certain boards.

Mr. O'Malley:

If the Deputy reads the Article he will see that it says that where a member of the Authority is nominated as a Member of Seanad Éireann——

Mr. Barry:

It says in the next paragraph, that if he takes up his position——

Mr. O'Malley:

Nominated as a member, not nominated as a candidate.

Acting Chairman (Mr. Doyle):

We are dealing with Second Stage. These matters can be teased out on Committee Stage.

Mr. Barry:

The Minister should look at this again. I know people who, because they received nominations for election to the Seanad, had to retire from State boards. If the Minister reads the second Article as well he will see that I am correct.

Mr. O'Malley:

It is perfectly evident that you are not.

Acting Chairman:

We can deal with the issue on Committee Stage.

Mr. Barry:

The Minister should have regard to the RTE Authority, in particular Ruairí Brugha who was in that position, if I remember correctly. The same outmoded thinking is evident in section 6 of the Bill. In a Europe without frontiers does it make any sense to stipulate that a member of the Authority must be ordinarily resident in the State? A person living in Northern Ireland, however well qualified could not——

Mr. O'Malley:

It would be totally impossible for a member of the Authority who was not resident in the State to act as a member of the Authority. It is a full-time job, five, six or seven days a week. It would be absolutely impossible if the person were not resident in the State.

Mr. Barry:

That is what worries me about this Minister, he has no savvy about what goes on in the business world. There are many members of boards of directors of very big companies who are not ordinarily resident in the State and whose job is equally onerous and equally time-consuming. They are not any less capable of doing their business. Indeed——

Mr. O'Malley:

But their job is different. They do not have to be in full-time attendance.

Acting Chairman:

Will the Minister allow the Deputy make his Second Stage speech?

Mr. O'Malley:

I am sorry, but it is very difficult not to correct the Deputy.

Mr. Barry:

It does not make sense in 1991 to have a clause like this for membership. If somebody was living in, say, Newry he could not be a member. Likewise somebody well qualified in competition policy but living in Brussels could not get this job despite modern communications which would allow him do the job on a full-time basis.

Mr. O'Malley:

How would he sit every day and hear evidence?

Mr. Barry:

It takes me longer to come from Cork to Dublin, and I am here every day, than it does to come from Brussels to Dublin. For Heaven's sake, we are in the 1990s. There are aeroplanes, fax facilities, telephones and so on. We are talking about not convening at all to have meetings. By reason of electronic wizardry we can sit in offices in different parts of the world while bringing our thoughts together in the one place. The Minister is not bringing the legislation up to date. He should not be that short-sighted about regulations; he is responsible for this. Just because something was there in 1972 does not mean it is applicable now. One might go back and find that the stipulation was there in the 1932 Act as well. All those regulations should be updated.

There is another omission in the Bill. Provision has not been made for preserving confidentiality and protecting business interests. There was such provision in the 1972 Act and it is left out here. It would have been far more important to leave that in than the outmoded thing about the directorships. What guarantees do undertakings have, when applying for clearance for agreements, that the details of the agreements will not fall into the hands of competitors? The 1972 Act at section 9(1) talked about confidentiality. These issues place a question mark over the Minister's understanding of the manner in which business works. The Bill does not make any provision for timescales for giving decisions. The Minister should be aware by now that time is crucial for business people and that delays can cost jobs. Indeed delays with regard to the decision by the Authority will cause hardship and lost opportunities not only for the business community but for the economy and the smooth operation of decision-making and planning. I need only remind the Minister of the sort of delays inherent in Bord Pleanála where sometimes there is nine months delay between an appeal and a decision.

The Bill combines academic law and heavyhanded bureaucracy. It is clearly lacking in business savvy and it is not in the interests of the business community nor, therefore, of the consumer. Because the Bill is unclear in so many areas, it creates the uncertainty for business people about which I spoke earlier. We should be wary of any of the Minister's contentions that this is an innocuous piece of business, because as now drafted this applies to every business from the smallest one man shop to the biggest companies in the country.

The Bill suffers because there was a lack of consultation with the business community. Their input could have been provided over the last two years had the Minister published a White Paper. However, the Minister seemed determined to produce a competition Bill just for the record and he is displaying a lack of concern for the shambles facing the business community at present. The Minister has also failed to provide an overall context within which the Bill can operate. For the most part the Bill comes across as a weak response to the needs of Irish industry. The Minister has used a scissors and paste approach to the policy formulation; he has ended up taking two contrasting approaches, that in the Treaty of Rome, Articles 85 and 86 and in the Restrictive Practices Act and he has attempted to merge them, leaving out the best of both and putting in the worst of both. That is an inappropriate mixture at any rate, but the failure to make the Bill clear is compounded by the Minister's failure to handle many of the issues I have raised here today. For that reason, while supporting the principle of competition policy, I will propose amendments on Committee Stage. The Minister in his speech said that he would be open to suggestion and would accept specific amendments.

Businesses should be aware that one of the likely consequences of the Bill will be high compliance costs given that the decision of the Authority may be appealed to the High Court. Certainly, no small business could contemplate even a relatively short hearing there because of the cost involved. I will return to these and other questions on Committee Stage when I hope the Minister will examine carefully the amendments I will be proposing.

Mr. Taylor:

At the outset I wish to advise the House that the Labour Party will not be opposing the Bill on Second Stage as we feel any legislation which will lead to more effective and fair competition can only be good for the economy and for the consumer in particular. However, I also want to say at the outset that the growing culture in which the Bill is introduced is a privatisation culture and I will not support the Bill if it is presented as a privatiser's charter. I have to say also that the claims which have already been made for the Bill have been somewhat exaggerated. It is not by any means the most important legislation the Minister could have introduced in the House. It will have a beneficial effect on aspects of our economic life but I do not see it as having the transforming and galvanising effect the Minister suggests.

I understand the desperation with which the Minister for Industry and Commerce is seeking to build monuments to his participation in Government, particularly wearing his other hat as leader of the minority Government partner, but I do not think this Bill is going to guarantee him a place in economic history. In fact, if the Minister is looking for more realistic monuments perhaps I could suggest one or two to him which might bring home to him the thought that he would not be well advised to regard the Bill as an acceptable substitute for the radical overhaul of industrial policy that is necessary. Any pretence that this Bill is some kind of panacea for unemployment would represent an utterly dishonest approach to the problems facing us.

When the latest figures for European unemployment became available last week they painted an even more depressing picture than usual. For the first time, since the end of the summer of 1985, the unemployment rate in the Community as a whole has experienced an increase in relation to the corresponding month of the previous year. The latest figure available for unemployment across Europe is 8.5 per cent. The reason European unemployment has begun to rise again on a year-by-year comparison is much higher than expected increases in the United Kingdom, Belgium, Denmark, France and, of course, Ireland. While the figures available do not yet take account of the changes in Germany, decreases in unemployment have occurred in Portugal, Italy and Spain.

The upshot of all this is that we in Ireland are now firmly at the top of the European unemployment league with an unemployment rate which is almost twice that of the European average. Among men, the latest comparable figures for unemployment are 6.7 per cent in Europe as a whole and 15.7 per cent in Ireland. Among women, the figures are 11.1 per cent in Europe as against 17.6 per cent in Ireland. Among young people, the comparative figure which emerges is particularly grim: 16 per cent or one in six in Europe but almost one in four young people or 23.3 per cent appear on the live register in Ireland. I should stress that these figures, which were compiled across Europe at the end of February, are already somewhat out-of-date. The past few months in Ireland have seen an inexorable rise in unemployment to a point where if the Government had any self-respect they would seek to ensure every single day that the crisis of unemployment is at the top of the political agenda.

Against this background, the Bill desirable though it is seems to be almost a trivial response but there are other elements which must be considered. I understand, for example, when the next ESRI medium-term review is published in one month's time or less it will contain very little that is optimistic in terms of unemployment or employment growth for the next five years. The ESRI have been remarkably accurate in their medium-term forecasting in the past and their upcoming forecasts must be taken very seriously indeed.

The growth in the economy which has been visible during the past few years is tapering away rapidly. In any event much of the growth which we have already seen and are likely to see is in very restricted areas. There has been substantial growth in multinational profits and the financial services sector but a great deal of this has already drained out of the economy and it has to be said that a continuation of the policy of wealthy companies of investing the bulk of their profits abroad will deny us the opportunity to benefit from that growth.

It is also clear that the Government have no clear coherent industrial policy aimed at translating growth into wealth retained in Ireland and jobs for our workers. We need radical changes in industrial policy to secure the concept of value added and to maximise investment in the economy. Without real substantive change, our economic growth will continue to have more impact on job creation in America, Japan and Germany than it will here. It is fundamentally important that we address the entire issue of industrial policy and its central importance in any re-examination of the role of smaller business and enterprises.

The experience of the economy since independence has been the failure of job creation. Associated with this, apart from certain brief periods we have had comparatively high levels of unemployment and unique levels of forced emigration by European standards. Indeed, it has become impossible to consider the unemployment figures released on the first Friday of each month without taking the highest emigration figures in the European Community into account. In this connection perhaps it is worth saying that there has been a great deal of talk and debate, justifiably so, about the legal and judicial extradition of Irish citizens but the media are almost completely silent how about the continuing scandal of the economic extradition of thousands of Irish people which continues at a disastrous pace.

I see it as the Labour Party's task to place the goal of full employment as the fundamental objective of Government back on the agenda. This needs to be demonstrated and expressed as a moral as well as a political commitment. We believe that growth, competitiveness and job creation can and must be pursued in the context of our vision of a just and democratic economy but we recognise that there are a number of critical strategic objectives in ensuring long term economic growth and employment. I would like to spell some of them out, as I see them, emphasising that this by no means is a comprehensive list.

First, no small country has achieved self-sustaining industrial growth and expansion in employment based mainly on multinational investment from abroad. A strong domestic industrial base is and must be of central importance. The objective must be to increase wealth creation and retain that wealth and value added in Ireland. This is simply not being achieved by current industrial policy. If it were, we would be ensuring that at least some of the £2 billion repatriated multinational profits that left Ireland last year was reinvested in this country.

Mr. O'Malley:

Could I draw your attention, Sir, to the fact that the Bill before the House is the Competition Bill, 1991? The Deputy may be under a misapprehension.

Mr. Taylor:

Could I refer the Minister to the beginning of his speech on the Competition Bill where he is talking about this Bill as being necessary and that it will play a fundamental role "to revitalise the economy, to encourage growth and thereby address the most pressing problem facing us all — unemployment"? He says: it will bring about basic restructuring of the marketplace by introducing into it a statutorily protected requirement for competition. I am telling him it will require more than this Competition Bill to obtain the very objective he is advocating in the opening lines of his Second Stage speech. What I am saying is very relevant. I am saying what he ought to be doing to bring about the objective which he says in the opening words of his speech is highly desirable. I do not know if it is better to have the Minister for Industry and Commerce asleep, as he was in some part of Deputy Barry's speech, or conducting himself by way of interruption, as though this was some kind of Committee Stage debate, or trying to dominate the scene from that position.

Acting Chairman:

Deputy, come back to the Bill, please.

Mr. Taylor:

Another major factor is that we have an inappropriate mix of firm sizes with too few firms capable of achieving the scale of activity necessary for a sustained, long term competitive position in international markets. This is expressed in too low expenditures on R and D marketing and management development. This problem is greatly added to and is, to a great degree, reflected by our geographic distance from large markets with high transport costs, a small population domestic market and a lack of co-ordinated growth and employment strategy by the major EC economies.

There is a fundamental dilemma facing many small companies here. In the context of a more integrated Europe with trade barriers tumbling, the businesses that will be best equipped to thrive will be those big enough to take advantage of economies of scale, or alternatively those that can offer excellence in terms of quality and reliability of supply. This is the case whether we are talking about manufacturing or service companies. Only the biggest or the best will flourish in the most competitive environment we are likely to see.

Issues such as quality and reliability are central. No small business can compete effectively if it has failed to get its act together, but small industry is also subject to considerations over which it has no control. For example, this time last year the Labour Party pointed out that there would be room for an immediate reduction in interest rates on mortgages if it were not for excessive caution on the part of the Central Bank. The consequence is that we have one of the highest real rates of interest in Europe. The gap between the rate of inflation here and our interest rate is not only unacceptably high, it is also causing considerable hardship to many middle income families who are crippled by mortgages and it is inhibiting the development of the economy because the cost of credit is unnecessarily high. No one suffers more from real interest rates than small businesses crippled by unnecessary overheads.

The main reason for all this is that the Central Bank are concerned to ensure that reserves are kept well above their minimum acceptable level of £2 billion. It would surely be appropriate for the Minister for Industry and Commerce to be devoting some of his time to expressing concern about this continuing conservatism and ensuring that the building societies and other lending institutions are encouraged to bring real interest rates down to appropriate levels.

Of course, it would be nice to be able to predict that the banks will respond immediately and will ensure that the development of jobs and enterprises is not stymied by artificially high interest rates.

Acting Chairman:

Deputy, I have given you latitude in making passing reference to a number of economic issues. You should get back now to the details in the Bill.

Mr. Taylor:

Indeed, I am doing that. This is all very relevant to the Bill in the economic context set by the Minister in his opening speech. The Labour Party have called on several occasions for the establishment of a commission of inquiry into the regulation of the financial serices industry; at every level the financial sector would benefit from such an investigation. A recent study published by Consumer Choice illustrates the scandalous range of charges imposed by the commercial banks on individual and business customers. How will this Bill effect that situation?

There can be very little justification for these charges other than the contribution they make to the banks already very large profits. These charges are imposed in the main without customers being made aware of them. Indeed, I imagine most customers would be both astonished and outraged to know for what they were being charged and, despite the publicity that has been generated to these charges, there has been little or no effort by the banks to reform themselves or, at the very least, to inform their customers comprehensively about the charges they levy.

If ever there was a case for ensuring that fair competition was allowed and encouraged, it lies in the hidden and secret cartel run by the main banks. Of course, they will deny hotly that they operate a cartel at all, but I for one would welcome an assurance by the Minister that the banks will be one of the first targets for investigation when this Bill becomes law. I would go further. I would argue that a commission of inquiry into the financial services sector would reveal that that sector makes a contribution to economic development which falls far short of the benefits it receives from our economy. Where small business in particular is concerned, the least that small businesses are entitled to is the assurance of fair play in their dealings with financial institutions and the hope that the banks will be willing to support a concept of reasonable risk in the context of economic development. The absence of that assurance is inhibiting the growth of jobs and the development of a more secure future for us all.

I referred to the possibility of a privatiser's charter inherent in this Bill. I would reject absolutely any notion that this Bill could or should be used to begin an assault on existing semi-State companies either by way of breaking them up or by privatising them wholesale. Deputy Barry asked if the semi-State companies would come within the ambit of this Bill. In reply let me say it is quite clear to me they most certainly do come within its ambit as do private companies. I recognise fully that, in the wake of last week's ESB dispute which caused so much inconvenience and not a little hardship, there is a great deal of public feeling against the ESB and public sector monopolies in general.

However, major questions of this kind must be examined as dispassionately and objectively as possible. We should let the dust settle before we make decisions on them. That is not to say that we should do nothing about the ESB situation, far from it. We urgently need to know what went wrong there, not particularly from the point of view of assigning blame, since in my experience there are always at least two sides to every industrial relations row, but if this situation is to be prevented from recurring, particularly if that has to be done on a voluntary basis, we need to know just why communications and relations became so bad so quickly.

In regard to the issue of privatisation generally, important in the context of this Bill, there may be sound economic arguments in favour of wholesale privatisation, but if there are, why are the proponents of the concept so shy about putting them forward? For example, why does the Minister for Industry and Commerce not prepare and publish a White Paper on this subject?

One other point must be made about the principles inherent in this Bill. It is a great pity — a tragedy — that the Minister who is proposing the Bill did not choose to apply its principles in his consideration of the Goodman case. That was the last occasion on which he was asked to exercise the power vested in him to protect the national interest. What a pity he has missed every opportunity open to him to use that power to ensure that at least one enterprise who has consistently misused a dominant position in the market place was brought to heel. It makes me wonder if there is any room for confidence that this Bill will ever make a significant difference.

When we come to deal with the minutiae of the Bill, the Labour Party will be putting forward a number of amendments. The Minister must retain both a right and a duty to investigate abuses and it is not clear that this power will still exist after the passage of the Bill. It appears that he will have to rely on the new competitions authority to do so and we regard this as unnecessarily limiting. We also believe that where individuals are adversely affected by anti-competitive practices there should be provision enabling them to apply to the Minister for assistance in prosecuting a case.

The nub of this Bill, and the enforcement of the concept behind it, is dealt with in a very peculiar and strange manner. The Minister is saying that anti-competitive practices are illegal, unlawful and prohibited by law. That is right and proper. Where is the main thrust in this legislation to carry that into effect? The standard norm is that when something prohibited by law is breached, it is a matter for some State authority, a Minister, the DPP or the Director of Fair Trading to receive complaints, carry out investigations and bring a prosecution. That is the normal and proper way to do it.

What is the Minister doing in this Bill? For practical purposes he is giving the whole matter over to the private individual or private firm to enforce it themselves. He is enunciating the right but anybody who wants to do something about it must go to the High Court and establish the complex, difficult and expensive proofs necessary to succeed in a claim under section 4, 5 and 6 of the Bill. It is asking a bit much and it does not stand up in common sense. I say this as a person who has some experience of conducting cases in the High Court and in the Supreme Court. The standard of proof that would be required to set up a claim by an individual or company under section 6 would be very high. It would have to be established that a huge company, probably a multinational or an enormously wealthy conglomerate, have gained a dominant position in the market and has abused that position.

At least two key elements of proof would be required. It is no use going into the witness box in the High Court and asserting that a company have established a dominant position in the market. That must be proved and established. It would be necessary to establish the volume of particular goods sold in Ireland and the percentage of the market captured by the company in question. It would require at least a highly skilled economist or a team of economists to establish that. The economists might have to go around the country doing research and examination. They may have to spend many hours or days investigating the market position of the company and considering whether it had reached a dominant position. The cost of getting an economist or team of economists to do all that would be no small sum. Lawyers do not come cheaply either.

Mr. P. Barry:

Who knows better?

Mr. Taylor:

This is major litigation. It has to be borne in mind that the multinational company would have an opposing team of leading counsel, the finest brains that money could buy, with their own team of economists. It would be a daunting prospect to undertake an expensive case under this legislation. Are there many individuals or companies who, faced with the kind of oppression envisaged in this Bill, would have the financial resources behind them to undertake the litigation that the Minister is authorising or who would be minded to do it, knowing that if anything went wrong they could be ruined? The costs of losing are mindboggling. The case could run for a week in the High Court and for several more days in the Supreme Court. The effect of such a loss on a moderately sized company could spell absolute ruin. It would require tremendous resources and motivation to propel a person or a company into taking a case to the High Court, with the likelihood of an appeal to the Supreme Court. What is the Minister purporting to do in this legislation, claiming that this will be some kind of panacea for the economy and employment? Is this a try-on or a suggestion that there will be some magical upturn in employment, in competitiveness, or fair business or trading, as a result of the enactment of this Bill?

If the Minister is serious in saying he wants to implement the directives of the EC, give them real effect, teeth and meaning here, he must tell this House that this is a matter that requires State backing. We must set up the State prosecution investigative service, whether it be the competition authority, the Director of Public Prosecutions, the Director of Consumer Affairs and Fair Trade or whoever, but it must be an investigatory and prosecution authority backed by State resources. One cannot leave that to some hapless, hounded, private individual or small company being hounded out of business by unfair practices on the part of some multi-million conglomerate and multinational company who are taking some hapless company, trying to make a living and provide some employment here, by the scruff of the neck and shaking them until the pips squeak. That is not the way to do this; it will not work and cannot work in that way.

I know the Minister too has a right to apply to the High Court for damages and an injunction under the provisions of section 6; he retains that power to himself. But reading the section it becomes quite obvious to anybody that it is an afterthought. There is no real meaning there at all; no real intent that the Minister will undertake such prosecutions. Had that been the intent the Bill would have been structured quite differently. The whole thrust of the Bill — which places the question of effecting the remedy slap in the hands of the private individual or private company — would not be there. As we all know, in this era of cutbacks one must question whether the Minister will have the staff, the investigators, the teams of economists and lawyers, or have the requisite moneys placed at his disposal. It is not on at all.

Even if one arrives at the stage that proceedings are brought, that some very brave individual, or company, decides that he will retain a team of economists or lawyers they will sweat it out for a week in the High Court and three days in the Supreme Court. The case will be argued out, he will establish the dominant position, what percentage of the market the multinational had, what extent they had abused it, but, even if all of that is established — which will involve some effort — and he wins the case, what then? What will be the effect of all of that? Will that be something terrible as far as the multinational is concerned? Will it really hit him for six? Will it really make all that much difference to him?

Let us examine what will be its effect and what the Bill provides. It says that the High Court can award damages. What would be the amount of the damages? How are damages computed in our courts? The rule in the awarding of damages is to try, so far possible, to reinstate the injured person to the same financial position he would have been in had the offence not taken place. In other words, to get damages he has to be able to prove how much was his loss, how much he lost as a result of this breach of the competition law. He would have to prove how much more profit he would have made had this competition law not been breached by the conglomerate or multinational against which he is bringing the claim. That, in itself, is not easy to establish or prove.

It is difficult enough when one is running a business, or engaging in a certain amount of business to say: "well, I would have done a lot better had fair competition applied, had this cartel arrangement not operated against me". It is easy to contend that he would have done much better but how much better would he have done? He must establish that; he has to tell the court. The court will say: "you come in here looking for damages; how much have you lost; how much damage have you in fact sustained; do not tell us it could have been this, might have been that or that it was within this range or that". That would not be accepted in the High Court; it would be thrown out. He must prove his loss before a court will award him damages. Even if he does that all he will be doing is putting himself back to square one, reinstating what he should have been earning by way of profit in the first place if the breach of the competition law had not taken place.

It is true that there is provision for exemplary damages. Exemplary damages are a strange animal. There is no certainty about how that would work or how the judges would award such damages. It is not something that is very commonplace in our law. As far as I can recall, it exists only in connection with the law of libel and is not often awarded in any appreciable amount. There is a fair reluctance on the part of judges to become involved in the area of exemplary damages because they are too vague, too broad, there is nothing specific about them. Even if a court was motivated to award some sum for exemplary damages the probability is that they would not be large enough to be in a meaningful and realistic way teach the multinational, or conglomerate a lesson to obey the provisions of the Bill. It is true that there is provision for an injunction that would restrain the conglomerate from breaching the law in the future. I can envisage that provision being effective. Certainly, an injunction would be a very effective remedy in controlling future abuse by that company in respect of a commodity.

We must ask ourselves: is it adequate to, as the Minister is doing in the Bill, simply provide for damages and exemplary damages? Is that what is done in other countries in similar circumstances? Certainly it is not. In fact, it is far from it. What is done? How is the matter tackled? How do the EC laws cover penalties for a breach of anti-competition regulations? The procedure is quite different, more effective. The EC Commission, under regulation 17/62, may impose fines for a breach of up to 10 per cent of the turnover of the company in the country in which they have committed the violation. For example, in 1986 the producers of polypropylene were fined, for breaches of the EC competition rules, a total of 58 million ECUs, that is to say, approximately £43 million for a breach, being 10 per cent of their turnover. That is a very different kind of picture to the one envisaged in this Bill. What is envisaged in this Bill, by way of sanction on a multinational, is small beer, would have very little meaning and, by no stretch of the imagination, would it operate as a sanction to make them think twice before breaching the competition regulations.

Apart from the polypropylene case there are other cases of individual companies having received fines of between 10 million ECU and 11 million ECU, approximately £7 million. The position in the United Kingdom is that in July 1989 a White Paper was published entitled "Opening Markets — New Policy on Restrictive Trade Practices". Their recommendation is the same as that applicable in the EC, namely, for a fine of up to 10 per cent of the turnover of the company in the country where they are breaking the competition rules. The British White Paper recommends also that directors and managers responsible for negotiating agreements be liable to fines of up to £100,000.

As I have said, I cannot see that the Bill as it stands now will be effective. What is being done here is to deal with what, in effect, is a criminal matter, making it an offence but leaving it to a civil remedy to enforce: those two do not mix. If an important prohibition is introduced here, the matter ought to be dealt with not by way of civil proceedings in the High Court — although it should be open to any person who has lost as a result to bring a claim for damages as well — but by means of a prosecution at the suit of some appropriate State agency, the most appropriate being, I suppose, the new authority being created under the provisions of the Bill. There should be a prosecution by that authority in an appropriate court, be it the District Court, the Circuit Court or whatever, under a provision which would impose a fine of up to 10 per cent of the turnover of the offending company in the country where they have abused a dominant position if they are found guilty of having done so.

It follows that if that course is to be adopted, the necessary skilled, professional staff should be provided to enable the authority to make that sanction meaningful. There is no point in giving the Authority the power to do that unless the skilled economists are made available to them to carry out the investigations, to establish the fact that there was a dominant position and, indeed, to be able to tell a court what is a dominant position. The Minister said this Bill was transparent. I find that incredible. It is the most opaque legislation one could possibly find. I do not see where the transparency arises. He concedes that what is a dominant position is not defined, as though that had some merit. The Law Library boys could be down in the High Court and Supreme Court arguing long and hard as to whether 50 per cent, 40 per cent or 60 per cent was or was not a dominant position in the context of a particular commodity. It could be different in the case of every commodity. Different judges may take a different view. The Bill is an absolute goldmine for litigation as it stands. Lawyers of all descriptions must be very pleased with this legislation. In the ten years or so I have been in the Dáil I have never yet seen legislation that is more of a ready-made bonanza for the legal profession. Every section that you read screams; the legislation is wide open and the legal resources that could be called in to play here, for companies that can afford to avail of them, will be huge. Is that the objective of the Bill? That will be the effect of the Bill. The Minister will need to examine it again.

As I said at the outset, we in the Labour Party support what the Minister is trying to do but he is not going about it in the proper way and the Bill will turn out to be a non-issue from the word go. If the Minister wants to protect the jobs and the consumer he will have to ensure that the Bill is effective. As it stands at present, clearly that is not so.

Mr. Rabbitte:

First, I want to reiterate the remarks of Deputy Barry concerning when the Bill was made available to Opposition Deputies. I felt that Deputy Barry would go on to deal with the wider question of the trend in the House, which is to publish Bills that, on the Minister's own advocacy, are as central and instrumental as this Bill and yet we get the minimum amount of time in which to consider them. This happened with the Social Welfare Bill and the Finance Bill, and now it has happened with the Competition Bill. Deputy Barry's point ought to be taken on board by the Government. It is not acceptable on an issue as complex and as important as this to present us with this Bill on a Thursday — if you are lucky — and to take Second Stage on the ensuing Tuesday. For those of us who have neither the array of Civil Service expertise that is available to the Minister, nor perhaps the unsolicited expertise of vested interests outside, it is extremely difficult to deal with the minutiae of a Bill such as this in the manner one would like in the time provided. It is a great pity that that trend has developed with this Government.

I take the view that, as the Minister sought to describe it in his contribution, this Bill should be, as it was presaged in any event, a central instrument in what the Minister calls "this Government's programme to revitalise the economy". That is the case the Minister has been making for many months. The largest Opposition Party pursued him every morning in the Dáil concerning the publication date of this Bill, so obviously they also regard it as a very important measure. Therefore, it is entirely unacceptable that the Bill does not turn out to be the major measure we were led to believe.

Secondly, Deputy Taylor made the case at the outset of his contribution that this Bill can be taken only in the wider context of industrial policy generally and he sketched in the extent of the endemic problem of unemployment, of which Members on all sides of the House are aware. I do not want to follow him down that road but at this stage the litany of failure of our existing industrial policy has very much achieved consensus status in this House. The extent of emigration and unemployment speaks for itself in so far as the unemployed and those living in the poverty trap are concerned. Many of the favourable economic indicators seem to be pretty academic from their point of view. The fact of the matter is that there are up to 300,000 people unemployed and emigration is running at a level similar to what it was in the mid-fifties. I merely want to record that it is regrettable that although the Minister promised a major review of industrial policy and had available to him the second triennial report on industrial performance — which was published some months ago, almost a year later than promised — we are unable yet to have a major comprehensive debate in this House on industrial policy. Time and again we are forced to respond in an ad hoc fashion to aspects of the problem and to limited measures that clearly do not encompass the entire scale of the problem. Quite clearly, competition policy is an aspect of wider industrial strategy and policy. It would be much better if this House could respond to the wider questions, such as the extension of the tax regime to the multinational sector and whether we get value for money on industrial policy spending before focusing on what are merely aspects of the problem.

Far from publishing a White Paper on industrial policy, the Minister — whether for reasons of internal difficulty in the Government or otherwise — seems to have adopted the approach of reform by stealth, in so much as the triennial report is gathering dust somewhere while the Minister has announced minimal measures of reform of the agencies in the industrial promotions sector and the IDA have taken on board reforms in terms of reviewing the efficacy of the traditional policy of doling out enormous grants and subsidies to attract foreign industries compared with alternative methods such as taking an equity participation in companies and so on. Nonetheless, the Minister had decided, perhaps for reasons relating to dispute within the Government, that we cannot discuss this central economic question because the facts of the matter are, and nobody can dispute this, that unemployment and emigration, both sides of the same coin, are the single biggest problem facing the country. Yet we cannot have an overview debate on industrial policy. We are forced, time and again to respond to what are merely aspects of the wider problem.

I am afraid I have to agree with the other Opposition spokesperson that the Bill is a major disappointment. Having regard to the background of publicity and promotion that led to its eventual publication — time and again the Minister took time out to tell us that this Bill would be a major instrument of policy in revitalising the economy and thereby contributing to growth and expansion——

Acting Chairman (Mr. Wyse):

While I do not object to passing references to other topics, the Deputy should confine himself to the Bill before us.

Mr. Rabbitte:

I propose to do that but I believe it is important to put the matter in the context of industrial policy generally. I regret the fact that the Minister——

Acting Chairman:

There will be plenty of opportunity to discuss industrial policy but the subject under discussion is the Competition Bill.

Mr. Rabbitte:

Am I to take it that Government backbenchers have been made aware of some intended scheduling of Government business about which the remainder of Members have not been informed? When do you propose, Sir, that we will have adequate time to discuss industrial policy?

Acting Chairman:

I am not arguing that point at all. I am merely saying that while I have no objection to passing references to such subject being made, I cannot allow you to continue discussing industrial policy as you are departing from the subject of the Bill before us.

Mr. Rabbitte:

It may surprise you that the Bill before us is an aspect of industrial policy. However, if the Chair does not interrupt me again, I promise I will not stray. I have made the point that I wished to make. I hope, Sir, that your party Leader, the Minister for Industry and Commerce will provide us with an early opportunity for a debate on that subject.

The Bill is a disappointment, having regard to the expectations of its merits, scope, comprehensiveness and effect that we were led to have. In fact, having had the experience of the radical changes the Minister introduced to the Companies Act, one might have expected that this Minister would have lived up to his commitments to introduce a Competition Bill which would be similarly radical in nature and broad in scope but that has not happened at all in this Bill. One wonders why its scope is so limited and why, in fact, it is likely to have a minimalist impact on the domestic Irish economy.

The fact that we are discussing the Bill is a testament that the concept of the free market is an illusion and that there is an acceptance by the very necessity of the Bill that the free market is distorted by various anti-competitive practices, aggregation, price fixing, collusion, abuse of dominant position and so forth. Indeed I argue that the search for perfect competion is chasing the Holy Grail. Adam Smith's dictum that wherever two businessmen meet to drink coffee there is suspicion that they are meeting to discuss price fixing is probably still as valid at the end of the 20th century as it was in the 19th century. Competition is necessary for a dynamic economy and in the best interests of the consumer. The Government must intervene to establish regulatory mechanisms to allow competition to function in the interests of consumer welfare and, one would hope of economic growth. This Bill overly reflects the ideological conviction of the Minister's own party that it is merely the absence of a proper legislative environment in the area of competition that impedes pure competition and the prosperity of business. The Minister clearly believes that competition in a legal framework is only the means to allow competition forces to operate. In other words, the business sector will exploit the opportunities given to them in the public interest if only they are allowed to be more competitive. I am afraid the Adam Smith conspiracy theory still has validity. There is no perfect competition. There are areas of tendency towards aggregation and there are areas of tendency towards natural monopoly. I do not believe there is a competitive solution to everything. The Bill seems to say, establish a competitive framework and let them at it. The free market forces should thrive and prosper once we enshrine the concept of competition legally. Then wherever we find anti-competitive practices the Minister seems to be saying, I will root them out. In a way, it is the other side of the coin of the 19th century anti-union legislation which, Deputies will recall, until the passing of the Trade Disputes Act, 1906, regarded trade unions as conspiracies.

The tendency towards natural monopoly I spoke about is not necessarily undesirable. Since the Bill accepts that it is only the abuse of dominant position that is ruled out, perhaps it accepts this approach. However when it comes to some of the so-called State monopolies I look forward to hearing the Minister's assessment of whether he accepts that industries, such as energy, communications, water and a number of others, fit into this tendency towards natural monopoly.

It is ironic that the Minister chooses to abolish the existing mechanisms in favour of a new competition Authority which amazingly can only be triggered by the Minister himself. Surely what is required is an independent, executive, sceptical, suspicious, pro-active Authority which initiate their own investigations and studies, quite apart from the views of whoever happens to be the Minister of the day. Indeed it flies in the face of the arms length trend of recent years in the public service which caused bodies like Telecom Éireann, An Post and even the office of the Ombudsman to be established. It leaves the new Authority open to the vagaries of the political and cultural disposition of the Minister for Industry and Commerce of the day. It is unthinkable in a political culture of patronage and against the backdrop of our recent record of collusion between business and politics that this Minister should advocate the creation of such a critical new Authority as a tool of the Minister rather than as an executive, independent Authority that is its own matter.

The Workers' party support the introduction of as competitive an economic and commercial environment as possible. The welfare of the consumer should be central to any competition policy. However, this Bill is obviously the progeny of a divided Government and reflects in a number of critical areas that it is the product of compromise and fudge rather than the hard-headed measure that the Government would have us believe.

I would like to deal briefly with the central question — one of the very few changes from the present position, because this is not a very extensive or imaginative Bill — the proposal by the Minister to create a competition Authority. This is dealt with in Part III of the Bill. It is quite extraordinary that the Minister, Deputy O'Malley, of all Ministers should have gone down this road. That a Minister with Deputy O'Malley's experience, background and record in these matters can advocate the establishment of a competition Authority which, as I read it, quite clearly must await the Minister of the day causing them to investigate whatever matter is being complained of, is an extraordinary volte-face. Section 11, Part III, of the Bill clearly states:

The Authority may, at the request of the Minister, [I underline that] study and analyse and, when requested by the Minister, [I underline that] report to him the results of any such study or analysis, any practice or method of competition affecting the supply and distribution of goods or the provision of services. A study or analysis may consist of, or include, a study or analysis of any development outside the State.

That is repeated elsewhere in the Bill. It seems that this Authority are inert unless the Minister of the day triggers their investigation into whatever issue is being complained of. Surely that is the direct opposite to what is required. Even under the present position I would argue that it is more efficacious and effective than that.

It is particularly extraordinary that the Minister, Deputy O'Malley, should bring forward such a proposal when he has time and again, quite properly in my view, indicated the political practice and political culture in this country where too often business and politics have been hand in glove. Too frequently we have seen examples of that phenomenon that have done us damage internationally, and yet the Minister is prepared to come in here and argue to put on the Statute Book legislation that will be dependent on the disposition of the Minister for Industry and Commerce of the day as to whether it is activated. I find that completely unacceptable.

The most generous complexion you can put on it is that it will put undue pressure on the Minister of the day, that he will be left open to all kinds of special pleading, that those with the inside track to the Minister of the day will be able to do exactly what they are not supposed to be able to do as a result of this Bill, and to do what caused this Bill to be brought before the House in the first place, that is, to pressure the Minister of the day into not proceeding with an investigation in a certain set of circumstances. That is not even fanciful. We know well from the very recent history of business in this country that that, in all probability, will happen. Therefore that section, in my view, neuters the Bill; it is virtually worthless. If there is an extraordinary Minister of the day who is so even-handed and well balanced that without fear or favour he will act, then perhaps it will work all right, but no such Minister, from any side of this House, has yet been born, and is unlikely to be born.

Very recently we had the experience of the Goodman case. Although that still lingers on in so much as the decision in respect of the Bandon plant and the Classic Meats takeover remains unresolved, it is not clear, going on the experience since last August when this House was reconvened, that the Minister, Deputy O'Malley, who is generally not known to be in particularly warm contact with the principal of that group of companies, would take a stand in that situation where there was gross abuse of the dominant position, to put it at its mildest.

I am dealing very centrally with the Bill now and I can rely on the Minister of State to relay to Minister O'Malley — who was too impatient to stay — that I do not think very much of section 11. The kind of mechanism which the situation requires is an independent, statutory Authority which is well resourced, which has available to it the expertise which can be quite complex in a situation like this. If that Authority think it proper, based on its knowledge from whatever source, that it should intrude itself into the resolution or tackling of the issue, then it should do so. It is a major defect in the Bill; what is needed is an independent body, pro-active, which can initiate its own investigations and studies and prosecute on behalf of the complainant, if it thinks fit, a particular action, depending on the circumstances. I agree with the remarks of Deputy Taylor in his contribution on this aspect.

I cannot see that the remedies suggested in the Bill are practicable in the kind of situation we can anticipate. The Minister seems to be abdicating his responsibility in this area; he is saying to the individual — or to the individual enterprise — that if they are aggrieved they should go to the High Court. Deputy Taylor, who has more experience of that than I have, instanced how impractical that can be in a great many circumstances, how expensive it undoubtedly is and how expensive it will be to garner the kind of evidence necessary to comply with the standard of proof likely to be required in important cases such as this.

As well as that, you are not dealing with prima centra pares; you could have very unequal partners locked in litigation. The small businessman or small trader who is expected to take on the might of one of the multinationals, whose practices he is complaining about or who threatens his livelihood, and that of a small number of workers employed by him, will not be engaged in an equal struggle. Indeed, if one looks at the monopolies area, there is one thing certain, it will be virtually impossible to establish accurate information on the context of market share.

In the Goodman affair we saw that his claim to market share went up and down depending on the expendiency of the moment. When it suited him he owned a great deal more — or controlled a great deal more — than 40 per cent but, when it did not suit him, it went down to 28 per cent. In fact, to this day, as the Minister admitted in reply to a parliamentary question from me last week, we still do not know the entire extent of market share in that sector. It will be extremely difficult to assemble that kind of industrial information and, therefore, all the more onus will be placed on whoever is prosecuting an action, the unequal struggle which I mentioned is likely to make it simply impractical in most cases where it would be valuable. Not only should the Competition Authority have executive powers, it should also have the power to prosecute on behalf of the complainant in circumstances it thinks proper the particular action and, in certain circumstances, the entire question of penalties which can be imposed need to be further examined.

Unfortunately, after all the promotions to which we have listened over recent months, the Bill seems to have been very hurried legislation and the critical Part III seems to have been born out of compromise in Government. In my assessment it is not the view of the Minister for Industry and Commerce. It flies in the face of a practice which has now become a trend in the public service. We set up An Bord Telecom; it was a good arms length decision because, with all due respect to civil servants — although I am a great admirer of many civil servants — the place for them is in the Civil Service, not running a commercial enterprise. The performance of Telecom Éireann since they are not under the aegis of the Civil Service has proved the merit of that. However, we did it at arms' length to such an extent that one cannot even put down a question in the House to the Minister. We did the same with An Post; we set up a separate body and we have taken similar decisions on aspects of the financial area. We set up the Ombudsman's Office and yet when it comes to an authority in such a critical area of the economy, it comes directly under the aegis of the Minister of the day, it is no more really than a creature of his Department.

I am sure we can give the benefit of the doubt to the high calibre, well intentioned people who will comprise the membership of the Authority but, without the say-so of the Minister, they are impotent. I look forward to the Minister dealing with that point in his reply.

Deputy Taylor asked about the situation in other countries, and he referred to the EC itself and to Britain. The comparable authority in Germany has a great deal more teeth and I would have thought, whether one comes from the Social Democratic or Christian Democratic tradition, perhaps that was the minimum we were likely to get in this country. It is interesting to note the decision which that authority came to in the Daimler case where the Government decided to overrule the recommendation. I can see nothing wrong with that.

I think that that division of the economic from the political is precisely what the situation requires. If the Authority, then, having assessed on economic criteria a particular case that it is seized of, comes to a decision and the Government of the day do not like that decision, then let the Government overrule it. At the end of the day nobody can question the primacy of politics and the authority of the Government to make the ultimate decision. If there are political considerations that cause the Government to take a particular approach that does not fall in the economic rationale that led the Authority to take their decision, then so be it. The people have elected the Government and that is the decision; but let us not have this political meddling ab initio which is the situation we have here. The Authority are reduced to the stature of a tool of the Minister rather than being their own master.

Deputies Barry and Taylor made the point that this Bill is a goldmine for lawyers. That is evidently the case. It is again one of the extraordinary ironies of this Bill that the last Minister in this Government one would expect to produce a lawyers's charter for endless valuable briefs is the Minister for Industry and Commerce who is known to have a particular view about that profession and, indeed, about some of the practices in that profession, and I do not know whether his Bill will tackle the problems in this profession effectively. There is an inducement to litigation as the only remedy in this Bill. It is a defect in it that the Authority have not been given some stature in this area and that the kind of role we saw the Director of Consumer Affairs playing in the area I am talking about is now abolished.

I would also like to take the opportunity to inquire how the Minister thinks this Bill will affect some of the traditional areas where it is suspected cartels have been and are being operated within the economy. It seems that it is the general wisdom in the House that it is proper to import into domestic law the contents of Articles 85 and 86 of the Treaty of Rome. I am not so sure that the original purpose of those Articles on a Europe wide canvas in the context of a common market are in all cases appropriate for imposition on a small domestic Irish marketplace. Quite clearly the EC itself has used those powers in the interests of the consumer and in the interests of creating a more efficient and dynamic economy in certain areas, some of them very high profile. Indeed, the powers taken by the Commissioner for Competition have been extremely rigorous. Very extensive powers are available to the Commissioner if he chooses to use them, and more and more the last Commissioner for Competition and the present one are doing so.

In yesterday morning's Financial Times there was an interesting example of that in an article entitled “US lobs a cutprice spanner into Europe's cosy soda ash market”. It details the case of two companies, ICI and a Belgian company called Solvay that had dominated the very valuable market for this particular chemical called soda ash on the entire European continent. It is quite clear, as the article euphemistically puts it, that Solvay and ICI abandoned their formal market sharing agreement in the sixties, and insisted that there is now no collusion between them. But they did have a share out of the market arranged between them as a result of which the EC fined them £48 million ECUs or £33.4 million for allegedly running a soda ash cartel. They also lifted an anti-dumping duty that had kept US producers out of Europe.

ICI effectively supplied the British and Irish market and Solvay effectively had control over the remainder of the European market. The Americans could not get into it. Now the EC Commissioner has weighed into that — I see the companies are appealing against these fines and so on — and the outcome will be very interesting to watch.

I wonder whether the concepts enshrined in Articles 85 and 86 are not for that kind of transnational commercial abuse rather than coping with the kind of situation that has brought such outrage from, say, the grocery trade in this country. At the beginning of his contribution Deputy Barry referred to the fact that, to his knowledge, the Minister had engaged in very little consultation with the various sectors of industry contending that, if they are not concerned with this Bill yet, they will be concerned with it after it is passed. It appears that there has been very little consultation on a Bill that is as important and far-reaching in its implications as this one. For example, RGDATA, for whom I do not hold any particular brief — but it seems to me that they are entitled to be heard — argue very strongly that, although they welcome the concept and the intent behind the Bill, they are satisfied that it will have a negative effect on their trade unless it is amended. They say that the trade is extremely vulnerable in that the Bill is proceeding through the Dáil without the input of the indepth report from the Fair Trade Commission. That is a point that is worthy of a reply.

The Irish Times of Thursday, 17 January 1991, has the obligatory notice from the Fair Trade Commission giving notice that the Minister for Industry and Commerce has requested the Fair Trade Commission to carry out a review of the Restrictive Practices (Groceries) Order, 1987. I understand that that review is due in June or July. Their point is, why such indecent haste?

They argue that the fact that the review is under way is stifling any input they would have to make to the Bill. They say it is critical to allow the FTC review to be completed so that the Bill can be informed by its findings. The Minister must reply to this point and their disquiet about the fact that the Bill expressly takes up a position of not including a ban on below cost selling. I do not recall the Minister dealing with that point in his speech. I should like him to outline to the House why he has decided not to include any such measure, having regard to the fact that it is the view of this association that it has worked in the past and that the food trade is not capable of policing itself. They point to the fact that it is impractical to think that suppliers will bring customers to court. We have recent evidence of that point. This is a very small marketplace and it is very unrealistic to expect a supplier to, say, one of the major multiples in the grocery trade, to cut off their nose to spite their face by bringing one of the big barons in the supermarket business to court. I do not think this will happen.

In addition, RGDATA in their briefing to me said there is no way, as they see it, that the Bill will be of any help to the small corner shop in Sixmilebridge who wants to take on the nearest Dunnes Stores. It is simply not a struggle of equals and the small store concerned will not be able to avail of the remedies which are putatively set out in the Bill. They claim that the livelihoods of some 81,000 persons are affected and say they have a right to be heard. They gave data from the Central Statistics Office to spell out where those people are employed. Those people are entitled to be heard and I should like to hear the Minister's comments on that point.

They believe that section 6 — this is the only section to which I will refer — contains a number of flaws. They say that suppliers and distributors will not institute proceedings against a major customer and that the sheer expense of legal remedy will nullify the positive benefits of legislation. They say that the point for legal action should be clarified to avoid frivolous, vexatious claims and that the exact nature of judicial proceedings should be clarified. They add that Irish courts should be able to recognise Commission decisions on the operation of Articles 85 and 86 — there is no case law here. They also believe that the ministerial interventionist role in section 6 (4) seems misplaced and say that this role should be given to the competition Authority. I have dealt with that point in some detail and I do not wish to return to it. A number of those points are at least worthy of reply.

The Minister, and every Member in the House, can fairly point to the competitive dimension enshrined in the Treaty of Rome. It is only fair to put on the record of the House that that is, of course, tempered by Title III of the Treaty of Rome which deals with the social dimension of all of this. I do not think we can forget the social dimension because the implications of removing all obstacles to competition in this economy, in so far as that is possible, means that there will inevitably be casualties. I am not arguing for those casualties to be maintained in unproductive jobs but, obviously, on the one hand there will have to be a social welfare net as a safeguard and, on the other hand, proper training and retraining facilities while replacement jobs are found for people.

The fact that we are dealing with a measure to create the proper legislative environment for competition to have full effect on the economy is obviously motivated by a wish to put the consumer at the heart of our considerations. It is clear that the consumer has been getting a very bad deal in Ireland. I am not clear on this aspect of the Bill and I should like the Minister to say exactly where the consumer fits into it. I know what the Bill intends to do and, in a macro sense, the Minister is clearly a disciple of the belief that, once we remove competitive impediments, there will be growth, jobs will be created and that somehow the consumer will get the benefit. Presumably he sees the market mechanism as mediating price more effectively. I agree with him on that aspect but I fail to see what remedy is open to the consumer. Surely it is not being suggested that the consumer, or any aggregation of consumers in any consumers' association, can invoke any of the measures enshrined in this Bill as remedies. It is simply beyond the capacity of the consumer to avail of these mechanisms.

It is not clear where the consumer enters the Minister's calculations. I am not clear on how we are putting the welfare of the consumer at the heart of this legislation. I do not think that is the way it will work and that is regrettable. It seems clear — I say this for the want of giving the Minister something tangible to deal with — that the consumer has been getting a very bad deal in regard to the sale of liquid milk. How, practically, does the Minister propose that enacting this legislation will deal with that problem? We heard the outcry when one supermarket sought to reduce the price of milk by 9p, from 54p to 45p, per litre. The fact that a new company are seeking to involve themselves in the Dublin market, and giving out free milk and other inducements, seems to be evidence that they believe there is a profit margin here.

I should like to refer to an article on the price of milk by Raymond Crotty in the Evening Press of Friday, 26 April. Clearly this subject will not be popular with other Deputies who represent some of our largest and wealthiest farmers. Nonetheless, if we are seriously talking about the consumer——

Mr. Hogan:

There are no farmers in Tallaght.

Mr. Smith:

You will be a long time waiting for a quota.

Mr. Rabbitte:

Are we talking about a milk quota or an electoral quota? This appears to be an area where the consumer has been ripped off and I would like to hear the Minister for Industry and Commerce specifically deal with it. The Crotty article refers to 13,000 large farmers, each with 35 or more cows, who produce most of the milk, being among the wealthiest, highest income people in the land. Mr. Crotty went on to talk about Avonmore withdrawing milk supplies because Dunnes Stores dropped the price and he referred back to the spate of creamery amalgamations that have taken place in recent years which is effectively giving five creameries control of nearly 80 per cent of the total milk market.

Mr. Hogan:

On a point of information, perhaps the Deputy would like to know that the gentleman he is quoting was a farmer and got out of farming.

Acting Chairman:

That is not a point of order.

Mr. Hogan:

It is a point of information.

Mr. Rabbitte:

I am aware of that. In trying to undermine the validity of his economic comment the Deputy cannot accuse Mr. Crotty of knowing nothing about farming.

Mr. Hogan:

He is an economist.

Mr. Rabbitte:

He is an agricultural economist of some reputation and his point should be taken on board. The article went on:

Between 1984 and 1989, the price paid to Irish farmers for milk increased by over 22%, or nearly twice the 12% rise in the rest of the EEC. When there was a world slump in dairy produce prices in 1990, the Irish creameries' hesitation in cutting the price of milk to producers caused them large losses — £6 million in the case of Avonmore.

Caught by a diminishing throughput, between the hard ground of large liabilities and the stone of competition for declining milk supplies, the consolidate Irish creameries exercised their increased monopoly power to squeeze domestic consumers. The Irish retail milk price was 2.51 times the farmgate price compared to an average of 2.23 times in the rest of the EEC in 1989.

It is a fair point and because so many consumers are affected it is a good tangible case to put to the Minister in terms of the practical application of his Bill. Can the consumer anticipate some improvement as a result of the enactment of this legislation? Even for the Deputies who represent large farming constituencies it is a fair point. Even the Deputies who represent large farming constitutencies would acknowledge——

Mr. Smith:

Like Deputy Sherlock?

Mr. Rabbitte:

——yes, like Deputy Sherlock, would acknowledge that criticisms that my party have been making, maybe too stridently in the past, of the function of the Common Agricultural Policy have some merit. It seems to me that even the Minister's Tipperary colleague, the Minister for Agriculture and Food, has come round to that view, and by the time Commissioner MacSharry is finished with him he will be a lot more convinced of it. The market mechanism was not allowed to function and it was necessary to have Government intervention in order to keep up the price to the producer. Otherwise, the consumer could have expected far more competitive prices during the years. It was considered that in order to maintain prices to the producer that could not be done. It is a reasonable question and I would like to hear the Minister address it.

The Minister should say what impact this measure will have on Whitegate, for example. The Minister has had controversy with the oil companies in the past and Whitegate, if my memory is right, was secured in the face of European regulations at the time. They got a derogation from Articles 85 and 86 for reasons of national security. Is Whitegate covered by this measure? What is the Minister's prognostication for the impact of that?

It is entirely facile to say that the reason we have a relatively dynamic thriving foreign sector is because the competition rules of the EC Treaty obtain for the foreign sector and the reason we have a relatively stagnant indigenous sector is because they are not subject to the same rules of competition. There is a great deal more than that to it. It is clear that where there are transnational companies able to dictate to national governments — and we have had examples with the oil companies — the appropriateness of Articles 85 and 86 is evident, but I question whether it is evident in all aspects of the domestic market.

It compounds what is really tantamount to an insult to this House that this important Bill was published a couple of days ago simultaneously with a Fair Trade Commission's review of competition law which none of us has had time to study. That is a great pity, because the Fair Trade Commission were asked, to put it simplistically, to look at the merits of introducing this prohibition system as compared to the control of abuse system. In the report I just got from the Library they did that in considerable detail and argued the merits of one point of view as compared to another. At least the Opposition spokespersons should have had an opportunity to study that report before being asked to respond in detail to this Bill.

From a glance at the summary recommendations, it is clear that whereas the legislation is informed by the conclusions of this review, there are more than differences of nuance in what the Minister has eventually come up with and what is recommended by the Fair Trade Commission in a report for which I presume they had available the necessary expertise to conduct an analysis of what is a fairly complex dimension of industrial and economic policy. I would point, for example, to the commission's recommendations in terms of the kind of body they envisaged being set up, which I would suggest on a cursory reading is nearer to the sort of executive independent authority I argued for, than this creature of the Minister which we are being asked to ratify.

Debate adjourned.