Amendment No. 21 is in the name of Deputy Taylor and amendments Nos. 22, 24, 25 and 26 are related. It is proposed therefore to take for discussion purposes amendments Nos. 21, 22, 24, 25 and 26 together. Is that agreed? Agreed.
Competition Bill, 1991: Committee Stage (Resumed).
Amendment No. 20 not moved.
I move amendment No. 21:
In page 5, between lines 13 and 14, to insert the following subsection:
"(5) Before granting a licence or issuing a certificate under this section the authority shall cause to be published inIris Oifigiúil and in at least two daily newspapers published in the State the fact that they have received an application for such a licence or such a certificate giving brief particulars thereof and shall invite any concerned person to make representations to them as to why such licence or certificate should not be granted.”.
I find the structures laid down in the Bill for the procedures to follow when applying for a licence or a certificate to be rather strange. It appears that a company who wish to get an exemption, a licence or a certificate make what amounts to a private application to the Authority and nobody knows that this application is pending. Individuals or companies could be very seriously affected by the grant of such a licence or certificate and they would not even know that the application was pending or that the Authority was adjudicating on the application before them. Obviously there is a potential conflict of interest between a person applying for this exemption or licence and other traders who may very well have something to say to the Authorities but cannot because they do not even know that the application is pending. Strangely, the Bill provides that after the decision is given and the Authority have concluded their one-sided examination of the applicant and have reached their decision — in other words when the horse is gone — then and only then is notification of the decision to be published inIris Oifigiúil I find that very strange, puzzling and totally unacceptable. Section 6 provides that if a person is aggrieved as a result of the grant of a licence or certificate by the Authority they can appeal to the High Court. Thank you very much for that. The first notification that the ordinary person or a company has of having been adversely affected by the grant of a licence by the Authority is the appearance of the decision in Iris Oifigiúil and if they wish to do anything about it they have to undertake major litigation in the High Court with all the expense that involves. This Bill has been described as a lawyers' paradise, and this is one of the reasons it is so described. Why should the Bill not provide for the more logical procedure that when an application for a licence is made to the Authority it is published in Iris Oifigiúil and in a couple of newspapers so that interested people would know that the application is pending before the Authorities and the affected parties could make their observations to the Authority. This would ensure that the Authority was in full possession of all the facts so that they could make an advised decision knowing both sides of the problem presented on the application. That is normal logic and normal legal procedure, and ensures that the granting of a licence is not based on a one-sided application based on the information put forward by the parties seeking the application.
The role of the Authority has been described as quasi-judicial nature, and so it is. As has been said, their decisions would be subject to judicial review as it is a judicial-type tribunal. Surely it is of the essence of any judicial or quasi-judicial tribunal that they have the opportunity to hear both sides of the question and not just the viewpoint of the company or undertaking looking for a very major boon to their business, the right to derogate from the law, the right to commit anti-competitive practices, a licence to do something which is otherwise prohibited. On their say-so and their's alone will the Authority come to their decision. I am well aware that persons aggrieved by the granting of a licence may appeal to the High Court. But why should they be compelled to do that at the very first stage of their knowledge? Why throw the matter headlong into the High Court, which would cost thousands, when they could have a more basic and informal hearing before the Authority or even if it was not a hearing at all they could send in a letter of explanation saying what their position is and stating the effect that the grant of a licence or this exemption would have on them? It seems very strange to publish the notice inIris Oifigiúil and the newspapers when the decision is already made.
The purport of my amendment would be to require the advertisement of applications pending before the Authority before the decision is made, so that a person or company who pick up this information can make representations and indicate to the Authority what effect it will have on them and on their business and the Authority can give an advised decision on whether to grant the licence rather than of necessity throwing the matter into the High Court. In every case where an aggrieved party wants to do something about the grant of a licence or an exemption, the only tribunal open to them will be the High Court. The tribunal of the Authority will not be available to them because they will have no means of knowing that the application is pending. It seems a very logical and appropriate amendment and I would ask the House to accept it.
These amendments from amendment No. 21 on address issues which are purely procedural. If these are to be provided for then it should be either by the Authority adopting procedures or, if absolutely necessary, the Minister prescribing procedures for the Authority. If procedures are laid down in the Bill which are subsequently found to be unnecessary, inadequate, unduly burdensome or otherwise undesirable in some way, they can only be changed by another Act or by primary legislation. If the Authority dispensed with those statutory requirements because they thought they were too onerous or unsuitable, it would call into legal doubt the Authority's own decisions.
Paragraph 6 (3) of the Schedule permits the Authority to regulate their own procedures, subject to the Act. This includes being subject to regulations made by the Minister under section 7 (6). Such procedures as might be made either by the Authority or by the Minister include drawing up guidelines for undertakings submitting applications for a licence, issuing apro forma document for applications, setting time limits for the consideration of licence and certificate applications, providing consultation mechanisms for parties to agreements and issuing invitations to third parties for submissions in relation to applications or to studies and analyses under section 11.
The Authority might also take decisions in relation to the publication of negative decisions of the Authority. The Authority are obliged by the Bill to publish decisions in relation to the granting of a licence or a certificate. The Authority might take decisions in relation to the publication of an intention to grant an extension to a licence under section 8 (2) and the Authority might take decisions on the content of their annual report under section 12.
Amendment No. 24 would require the Authority to carry out administrative action which may or may not be appropriate. It is certainly not appropriate to make these requirements compulsory in the Bill. These are issues best left to practical experience and to ministerial regulation, where necessary. The notion of a quarterly report is overly bureaucratic. The Authority will be publishing on a regular basis their decisions as they are made. Apart from the annual report which is already provided for in section 12, there is no need for further periodic reports.
The Government amendment No. 25 in my name removes the necessity to have the full text of the decision published in two newspapers. The full text will be published inIris Oifigiúil and a notice to that effect will be published in one daily newspaper. The full text of subsection (6), as amended by the Government amendment, would read as follows:
On granting a licence or issuing a certificate under this section, the Authority shall forthwith give notice in the prescribed manner to every body to which it relates stating the terms and the date thereof and the reasons therefor and cause the notice to be published inIris Oifigiúil and cause notice of the grant of the licence or issue of the certificate, as the case may be, to be published in one daily newspaper.
Amendment No. 26 deals with the publication of refusals of licences or certificates. Since refusals have no effect on third parties, publication is not essential. It will be possible for the Authority to publish where they consider that it might be beneficial.
Specifically on Deputy Taylor's amendment which is before us, it seems that the Minister is untypically conveying a lack of conviction about his own measure. This is the second or third occasion when he has pleaded with the House to permit him to enact the legislation as it stands and to see how the Authority will work in practice. That seems undesirable, having regard to the moment of what we are discussing. For the Minister to dismiss the import of Deputy Taylor's amendment as being purely procedural seems to play down entirely the significance of what is being sought. If there were any such thing in business or commercial law as the concept of natural justice, surely any third party potentially affected would have the right to make a submission in advance of the granting of a licence. There is very little point in talking about its being published inIris Oifigiúil and in two daily newspapers after the grant of the licence in question.
The Minister said last week that the purpose of using the term "licence" in this section is to emphasise the administrative as distinct from the judicial. In this circumstance the Authority will be acting in a quasi-judicial sense and making a decision of the most profound import not only for the undertakings seeking the derogation but potentially for third parties who will be affected. In those circumstances it seems imperative that these third parties should have the opportunity in advance of the licence being granted to make a submission. I am quite sure that most of those undertakings engaged in anti-competitive practices or in concerted in practices as envisaged by this Bill and to whom a derogation would probably apply, are quite convinced that what they are doing is quite proper and necessary in the national and economic interest. I am sure even those who do not expect to get a derogation and who ought not get a derogation will be similarly convinced that what they are doing is correct and proper. It is only by opening the process to third parties who are potentially affected that the Authority can fully weigh in the balance the evidence about whether or not that is the case. That interested third parties should be kept in the dark and unaware of the fact that the Authority are seized of a particular application, is contrary to natural justice and undesirable. It invites appeal to the High Court, which in many if not all cases is undesirable.
The more we go into this Bill the more extraordinary I find the Minister's response to points made from the Opposition benches. He talks about the undesirability of having too many regulations and about letting the Authority find their own feet and draft their own rules. He is asking us to give a blank cheque to the Authority in deciding how to regulate themselves, then he says it is undesirable to write this into legislation but he has no problem writing in whether the advertisement should be published in one or two newspapers. Surely that is bureaucracy carried to the extreme.
Everything he has said in the debate on this Bill the last day and today seems to point in the direction of controls, of blind faith in the operation of the Authority from the bureaucratic point of view, but anything that might benefit the people affected by the Bill, the consumer, the business community or the commercial world, must be regulated but not the other way round. The Bill has been drafted by a Machiavellian partnership with a bureaucrat in an ivory tower. Nothing in this Bill shows common sense.
It is absolutely clear in natural justice that if somebody will be affected by a regulation he should be given notice of that, at the very least by way of an advertisement in the papers saying the Competition Authority are considering an application for an exemption from the Competition Act by such and such a firm in relation to such and such a product, and sufficient time then should be allowed for representations to be made as to why that application should not be granted. Apparently the Minister is not going to provide for that. He is just going to let the Authority make the decision. To give it even a narrower circulation of interest, his amendment provides that the readers of only one newspaper should know about this, not even the readers of two newspapers.
I do not understand the Minister. It appears he has not looked very closely at this Bill. Many things in it are certainly not in the interest of creating jobs or promoting competition or in the interests of the commercial or business world. The provisions do nothing to promote more economic activity.
We need competition badly. There is no ceiling above which this Bill will operate. It affects every business in the country. The Confederation of Irish Industry in the introduction to their submission to every Member of this Dáil said that every single business undertaking will be affected by this Bill, yet we appear to be getting no response from the Minister to very reasonable amendments put down here.
To accept amendments Nos. 21, 22 and 23 in Deputy Taylor's name and mine and the first half of my amendment No. 24 is the very minimum the Minister could concede. Where somebody's business undertaking is going to be affected by a decision of the Competition Authority, it is only right that notice of that fact be given publicly to the people concerned. If an industry have applied for an exemption and they are in competition with some other firm, that firm should know there is a danger their position will be affected by a decision made by the Authority. It is not reasonable that the first the people concerned know about the decision of the Authority is when they see it announced in a newspaper — if they see it. Think of the number of daily newspapers.
The Minister's amendment provides that notice of the grant of the licence or issue of the certificate will be published in one daily newspaper. That is all that is provided if the Minister's amendment is carried. It does not say where that newspaper will be circulated. It could be an evening paper published in Britain or anywhere else. They the affected person can refer to it if he happens to see it and finds out how the decision of the Competition Authority has affected his business. The only recourse of such an individual or group at that stage is to go to the High Court, and many people have only too painful financial experience of what going to the High Court means. It is an extremely expensive undertaking.
The second part of amendment No. 24 makes a different point, although on the same matter. It refers to the authority granting or refusing an exemption and it provides that: "In doing so the Authority shall have regard to the legitimate interest of undertakings in the protection of the confidentiality of their business.". The CII make the point that all agreements have a potential economic effect and any agreements or practices notified to the Competition Authority which expose an enterprise to liability for damages may be prohibited. That means, to be on the safe side, if they do not decide to do it themselves they are involved in more expense employing accountants to comply with this section. All businesses involved will have to consult their lawyers and accountants and if there is the slightest doubt, their lawyers and accountants, to protect themselves, will advise their clients to apply for an exemption.
The probability is that the Competition Authority in their initial period will be flooded with applications for exemptions. Each concern will fear that if they apply, the information they would have to give to the Competition Authority will not be kept confidential and the people with whom they are in competition will find out some of their business secrets. That is why it is necessary to include some confidentiality in this Bill.
The Minister should accept amendments Nos. 21, 22 and 23 and the first half of amendment No. 24. The Minister is probably right in saying that the fears about this Bill are exaggerated but that does not mean that the fear is not real to people who are afraid they may be caught by the Bill's provisions. The Minister must do everything possible to allay those fears and show them that this Bill provides adequate measures to protect confidentiality in this case and in the other case I mentioned this morning.
The Minister seems to be making the point that amendment No. 21, providing for prior notification to interested parties of the fact that an application for a licence or an exemption is pending, is a procedural matter. If it is a procedural matter, then so is section 4 (5) because it provides that: "Before granting a licence or issuing a certificate under this section, the Authority may invite any Minister of the Government concerned in the matter to offer such observations as he may wish to make.".
If procedural matters are to be excluded, and notification to a third party is a procedural matter and not included for that reason, why is a special clause put in to provide that the Authority may invite any Minister of the Government to make observations on a pending application? Can the Minister explain why any Minister is given this special mention, that the Authority may notify him of a pending application, but a person, company or trader who could be very seriously adversely affected by such a licence being granted is totally ruled out from receiving any notification? It is not that procedural matters are excluded from the Bill to be dealt with at some future date. If that were so, subsection (5) would not be there. The real intention is that for some strange reason, third parties are not to be given prior notification of pending applications. I cannot imagine what that is unless it is some diabolical scheme to substantially increase the earnings of lawyers in the High Court. That is the only logical reason that comes out of the provisions of the Bill as it stands. Surely the whole thrust of modern thinking in society today is to try to avoid the expense, problems and delays involved in major High Court actions, if at all possible. Surely that ought to be an objective of Government in a modern society. Why run people into the High Court when it may not be necessary to do so? Hereby a very simple procedure can be devised under which a substantial number of cases which would otherwise end up in the High Court can be dealt with and concluded satisfactorily in a cheaper, simpler and more expeditious hearing of the matter before the Authority. This Authority would be more expert on the issue because they would be dealing with it all the time, unlike the High Court.
Can the Minister assure the House definitively — and I ask him to deal with this point in his reply — that the procedure will be brought in immediately under which prior notification will be given to interested third parties so that they will know that an application is pending and will have the opportunity to make representations in opposition to a pending application for a licence or a certificate? If the Minister is giving that undertaking I would be very happy to accept it and to withdraw the amendment. If not, it seems to me we have a very serious problem. I cannot understand how anybody in the House can stand over the notion that a one sided decision will be made, assuming it is constitutional, based only on the representations of the applicant seeking the licence with no knowledge to the interested parties who may be affected by it. That is wrong in principle, it is wrong in logic, it is wrong in common sense, it is wrong in justice. The intention must be to do just that because when one looks at subsection (5) and finds that only a Minister of the State is given special mention as being able to receive advance notice of the fact that an application is pending, one is led to the inevitable conclusion that there is no intention to make provision for prior notification to interested third parties.
If the whole question of publishing notices of applications and decisions is a procedural matter, subsection (6) would also be a procedural matter and yet it too is included in the Bill. It is not that procedural matters are excluded to be dealt with later because many procedural matters of importance are rightly included in the Bill. There is no basic axiom that no procedural matters are included in the Bill. I would have thought it was very appropriate to include them in the Bill if they are of sufficient importance to warrant that. What could be more important than a serious application affecting a person's livelihood, the viability of a company and its employees coming before an authority for a decision? Why should the Authority be deprived of the full facts before coming to their decision? When you think it through, the Authority are being deprived of crucial information which they may need to enable them to arrive at an informed decision. Apparently, by a deliberate act we are taking the step of depriving them of crucial information which, if they had such information, may result in their arriving at a different decision altogether and thereby making unnecessary the whole panpoly of a High Court hearing with all the costs on both sides that that entails, taking up precious time in the High court for days on end. We have legislation going through which seeks to appoint more High court judges. A few more may be needed to take up unnecessary appeals as a result of this strange measure being introduced today. It is a logical and sensible measure and I hope the Minister will agree, at this late stage, to accept it.
I support Deputy Taylor in what he has stated in relation to subsection (5). I cannot understand why a Minister of a Government must be singled out for special attention under the provisions of this section and that he or she must be the only person who would be invited to have a submission made to the Authority in respect of a matter that may come before them. Surely we have had many examples in recent years where a Minister was in a position to influence the decision of an authority. By a selective submission to the Authority he could unduly influence the decision that might be made by the Authority. We can accept an undertaking from the present Minister that there would not be any undue influence on a decision of the Competition Authority but he may not always be Minister for Industry and Commerce and this legislation will continue to be on the Statute Book. Any other Minister could, on invitation from the Authority, unduly influence such a decision. I support Deputy Taylor and Deputy Barry in appealing to the Minister to accept the amendments which would allow companies to make submissions so that the full information is proprely heard. The Competition Authority would then be in a much better position to make a mature and proper decision.
In relation to the point that has been made in regard to subsection (5) — which is not the subject of these amendments — this provision was inserted to ensure that the Authority will be aware of public policy whey they take decisions. That stands to reason and is a normal provision. The decisions, although they will be better informed as a result of knowing what public policy is, will remain independent of the wishes of any particular Minister who is consulted, who will simply have a right to state his view or policy in regard to the matter.
So far as compulsory advertisements of every application being made are concerned, as I have explained already, it seems inappropriate in the interests of trying to minimise costs and bureaucracy that every single one of these applications would have to be advertised because many of them will be repeat type applications and a huge proportion of them will be similar type applications. It would be ridiculous to force each one of these to be advertised in one or more newspapers at some considerable cost. It is considered, not just off the top of somebody's head, but after lengthy consideration of all the different options, that the appropriate way of dealing with the advertising requirement or suggestion or the giving of notice is that the Authority have the jurisdiction to do that as they see fit. If, for example, they receive 100 similar applications, the fact that they advertise the existence of one is sufficient and they should not have to advertise the other 99 where the same considerations apply. In these circumstances, I cannot give an undertaking, such as was requested by Deputy Taylor, that every single application be publicly notified. The fact that a provision to that effect is not contained in the Bill does not mean that the Authority or the Minister will not wish to do that in appropriate cases but not in cases where it is unnecessary.
The Authority will be the best judge of that and it should be left to them. I understand that that is their view also. It would be enormously costly and bureaucratic if this obligation was put everywhere. There is an obligation on them to advertise the granting of a licence or a certificate. However, this is a different matter; it is a derogation from the law and when it is finalised it becomes part appropriate that when a licence is granted it should be advertised or public notice given of it.
Deputy Taylor made the point that because some procedural matters are dealt with in the Bill every procedural matter should be dealt with in it. I do not think this proposal stands up. Some procedural matters are dealt with in the Bill but they are only the minimum necessary to ensure legal security. Because various multifarious other matters are not dealt with specifically in the Bill it will not stop them being dealt with in regulations made either by the Minister or the Authority. That is why these powers are there. For examples, it would be entirely unreasonable if the rules of the courts and all the various procedural points which arise had to be laid down in this House in Acts of the Oireachtas. We would be in an impossible position because as circumstances changed and the rules of court needed to be changed it would necessitate coming back here with full primary legislation. I do not think anyone would argue that that would be appropriate.
Equally, by way of analogy, it should be accepted that the same principle applies in this case. The kind of things we are talking about are analogous to rules of court. Therefore, I do not think it can or will happen in practice that particular types of applications will be dealt with by the Authority without their hearing several other points of view. As I made clear at the outset, they will have ample powers to seek and hear submissions in regard to these matters. I do not think the Authority would regard themselves to be doing their job adequately if they did not make arrangements to hear differing points of view in regard to a particular matter. I do not think they could claim to have investigated the matter properly for the purpose of hearing an applications unless they had heard different points of view, not necessarily from every person who might want to offer a point of view but at the very least from people who are representive of and in similar circumstances to a larger group of people who would have a common commercial interest.
I hope I have dealt with the points made and that, on reflection, Deputies will appreciate that it would be unwise to try to lay down very detailed rules of procedure in primary legislation. If any one of these rules do not work out in practice extactly as people would like it to, it would mean that we would have to come back to this House with a new Bill to change it. If the procedures laid down in regulations, whether they are made by the Minister or the Authority, do not work or are deficient in some way either the Minister or the Authority can change them and do so very expeditiously.
I want to reply briefly to the points made by the Minister. Amendment No. 21 is in no way analagous to the type of material in the rules of court This amendment deals with the net specific point of crucial importance which goes to the root of the matter, notification to members of the public that an important application is pending. This is not the kind of matter dealt with in rules of court. Different matters are dealt with in rules of court. I agree with the Minister's general proposition that the matters dealt with in rules of court are not appropriate to general legislation but this is a very special matter which goes to the root of this legislation.
The Minister said that his objective here is to try save costs and that there would be a multiplicity of expenses incurred if all these applications had to be advertised. I want to make two comments in reply to that. First, the cost of putting these advertisements in the newspapers would rest with each applicant and not with the Authority or the State. No doubt the Authority will charge an appropriate fee when each application for a licence is made to them. That fee will take account of the fact that advertisements are necessary and the Authority may prescribe that the advertisement has to be placed by the applicant rather than the Authority. It would be a mirror image of the situation which applies under the planning legislation where, on each planning application, an advertisemet has to be placed in the newspapers. What is the purpose of that? It is not to boost the revenue of the newspapers. It is for a very important purpose — it is so that people who may have an objection to a planning application will know about it and can lodge their objection with the local authority, the planners, who will know about the objection and take it into account before reaching their decision. It would seem very strange in the planning context also if the planning Acts provided that the local authority could only publish notice of a planning application after they had made their decision. Would it be an answer by the Minister for the Environment in that case to say people can appeal the decision to An Bord Pleanála? That is not the point; the point is that it must be open to every person to make their objections known before a decision is made. There would be no extra costs involved in this. Indeed it would be the reverse. The expense involved in putting a notice inIrish Oifigiúil and the newspapers would be a discipline on would-be applicants and put a cost on them which would very effectively avoid frivolous, unnecessary multitudinous applications beings made, which the Minister seems to think may well happen. The financial constraint of the advertisements would stop that. If one is talking about costs, what about the cost of a High Court appeal? Where does this come in in comparison with the cost of a newspaper advertisements? The two just do not bear comparison.
The Minister is not prepared to give an undertaking to the House that regulations will be brought in which will require notification to interested third parties by advertisements before a decision is made. He seems to think that the Authority will make such a provision. When the Authority look to section 4 (5) they may very well decide that they will not do that for the simple reason that the Oireachtas clearly signalled to them that they are not to do it. They may well argue that the Oireachtas had carefully considered the question as to who was to be given prior notification — it was not put aside or left for later decision by the Oireachtas but was specifically dealt with under section 4 (5) which provides that any Minister of the Government can be invited by the Authority to make representations. They may well say that if the Oireachtas wanted to have interested third parties involved in this, they would have said so and had dealt only with the issue of an invitation to any minister of the Government to make representations. I have no objection to that proposal, it is prefectly in order. I take the Minister's point about public policy. I do not think it will have a direct bearing on the judicial decision the Authority will have to make, nonetheless it is acceptable enough. The point I make must stand up. The minister's response is indefensible and makes no sense. It does not involve a whole rigmarole of procedural regulations but deals with one very clear point.
I want to refer to my amendment No. 26 in which I propose that when a licence is refused, notification of that fact should be published inIris Oifigiúil. The Bill as it stands provides that only when an application is granted is it published It makes no provision for publication in the event of a refusal, but it seems that a refusal is also a matter of public interest. It is a matter in which many people and companies would be interested as regards setting the parameters and guidelines for the future. That is something that should not be kept secret but should logically and reasonably be in the public knowledge.
I do not accept the reasons suggested by the Minister that I should withdraw these amendments. They are important amendments and the Minister has not lessened their importance by his contribution but has underlined the necessity for them. The Minister stated something twice today as his view and that he understood it was a view shared by the Authority also. Perhaps I misunderstood him but the Authority are not set up yet. This Bill proposes the setting up of the Competition Authority. I do not known who the Minister is referring to when he says his view is shared by the Authority. Perhaps they are set up and he does not want to admit it here. Are they set up?
I have made it clear on a number of occasions in public that the Fair Trade Commission will be renamed as the Competition Authority.
Will they have the same composition?
Yes.
Will the present directors of the Fair Trade Commission be the directors of the new Authority?
Yes, that is my intention.
Has the Minister discussed this with them?
I do not recall that being said.
I do not recall it being said but I am willing to take the Minister's word for it. That is certainly the first I have heard of it.
There will be no job creation there.
The Minister said in defence of his position in refusing to accept these amendments that the Authority would not be doing their job in investigating an application for an exemption unless they discussed it with interested bodies or people who might of affected by that decision. Why does that not apply with regard to Ministers of the Government? If the Minister has so much confidence in the Authority doing their job what is the necessity for susection (5)? That subsection states that: "the Authority may invite any Minister of the Government concerned with the matter to offer such observations as he may wish to make". If a Minister of the Government in conserned surely the Authority would be doing their job by inviting him to make his observations regardless of subsection (5).
The Aythority will legitimately take the view as stated by Deputy Taylor today, that the Minister would want them to consult only one person, that is, a Minister of the Government. They would not consider themselves obliged under the legislation establishing them — even though they have been already established before the legislation was introduces — to consult anybody else who may have observations to make. As for the Minister's rather specious argument about the cost, that is childish. The cost of a half day in the High Court for somebody who is interested in the matter and feels it necessary to pursue their arguments in that court, if they have the chance to do so——
Half a day, the Deputy must be joking.
The cost of half a day in the High Court would pay for an advertisement in every newspaper in the country and in Europe. The Minister's argument is not a serious one and I am surprised he made it. The Minister has given no explanation as to why he thinks an advertisement in one paper would be sufficient rather then in two. He is creating the impression that in some way the Authority's works must be kept hidden. I am sure that is not the Minister's intention but that is certainly the impression that has been given here today.
It may be the impression given by the Deputy. The Bill speaks for itself.
Under the Bill nobody need know until a licence is granted that the Authority were even considering it.
Nobody would know that the application was even made.
That is true. Even the minimum necessity of advertising in two daily newspapers has been reduced to one. That does not make sense. From what the Minister said here today I do not intend to withdraw my amendments.
Does Deputy Mevyn Taylor wish that I put the question on his amendment, amendment No. 21?
I have something else to say on amendment No. 24 which deals with the point we have been discussing.
It would be advisable if Deputy Barry made his point now. All contributions on these amendments should be made now.
I made the point earlier about confidentiality. It is necessary for the Minister to address this matter. I want to ensure that as far as possible the people who will be affected by this Bill — the Confederation of Irish Industry have said that virtually everbody and every undertaking in the country will be affected by it — will be given some guarantee under the legislation that when they submit documents and accounts in support of an application for a license or an exemption those documents and accounts will be treated confidentially and their contents will not be available to their competitiors in business and trade. I accept that my amendment is all-embracing but the only way I can get a seprate vote on it——
When we reach the amendment Deputy Barry can formally move it and call a separate vote on it if he wishes.
I will be calling a vote on amendment No. 22 but I was going to withdraw No. 24 and re-enter it on Report Stage if that is possible.
If the Deputy has time to do so.
I think that would be correct procedure.
Má cheapann tú go bhfuil an t-am agat.
Ceapaim gurb é sin an rud ceart a dhéanamh.
Fan go dtiocfaimid go dtí leasú Uimhir 24.
On the confidentiality question, that is covered by paragraph 9 of the Schedule. The Deputy need have no concern on that point. In appropriate cases the question on confidentiality is carefully observed, in the publication of reports and so on, and that is what is envisaged in this Bill. In so far as the other general points are concerned I do not want to reopen this discussion again but we are making advertising in newspapers compulsory. How much more public can you make something? I say that in reply to Deputy Barry's allegation that everything in the Bill is secretive. Deputy Taylor thinks that because somebody starts some from of procedure and does not advertise it in the paper there is some new horrendous practice growing up here. Every day hundreds and maybe thousands of cases are brought to court and nobody knows about them except the parties concerned. You do not give notice of the fact that you are issuing a plenary summons.
It does not involve a derogation from the law. It is to secure your rights under the law, which is a different thing.
As regards the Deputy's point on amendment No. 26 that when an application is refused that should be advertised also, I do not see the need to do that because nobody is affected by it. You are back at square one and the ordinary law applies. There is no derogation. Nobody is affected. I do not think that that fact needs to be advertised. The Government are not seeking to become a benevolent society for newspapers.
I take the point made by the Minister about amendment No. 26, but he did not really deal with my concerns. The Minister said earlier that he fears the possibility of a multitude of applications, many of them repetitious. If an application on a particular issue is made and is refused but nobody knows about it, there may well be a multitude of people who keep on making applications without knowing that application for that particular item has already been made and refused. On the other hand, if applicants are notified once that an application for a particular issue was made and refused they will not waste their time or their expense on further advertisments, more work, or whatever by making another application, knowing that they would be backing a loser because an application for that item had already been made and refused. That was my thinking in the tabling of that particular amendment.
Amendment put.
The Committe divided: Tá 58; Níl, 72.
Tá
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Allen, Bernard.Barnes, Monica.Barry, Peter.Belton, Louis J.Boylan, Andrew.Bradford, Paul.Browne, John (Carlow-Kilkenny).Bruton, John.Bruton, Richard.Byrne, Eric.Connaughton, Paul.Cosgrave, Michale Joe.Cotter, Bill.Creed, Michael.Crowley, Frank.Currie, Austin.D'Arcy, Michael.Deenihan, Jimmy.Doyle, Joe.Enright, Thomas W.Fennell, Nuala.Ferris, Michael.Finuance, Michael.FitzGerald, Garret.Flaherty, Mary.Flaherty, Mary.Flanagan, Charles.Foxe, Tom.Harte, Paddy.Higgins, Jim. |
Higgins, Michael D.Hogan, Philip.Howlin, Brendan.Kavanagh, Liam.Kemmy, Jim.Kenny, Enda.Lowry, Michael.McCartan, Pat.McCormack, Pádraic.McGahon, Brendan.McGinely, Dinny.Mac Giolla, Tomás.Mitchell, Gay.Moynihan, Michael.Noonan, Michael.(Limerick East).O'Brien, Fergus.O'Keeffe, Jim.O'Sullivan, Gerry.O'Sullivan, Toddy.Owen, Nora.Quinn, Ruairí.Rabbitte, Pat.Reynolds, Gerry.Sheehan, Patrick J.Sherlock, Joe.Spring, Dick.Taylor, Mervyn.Timmins, Godfrey.Yates, Ivan. |
Níl
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Ahern, Dermot.Ahern, Michael.Andrews, David.Aylward, Liam.Barrett, Michael.Brady, Gerard.Brennan, Mattie. Cowen, Brian.Cullimore, Séamus.Daly, Brendan.Davern, Noel.Dempsey, Noel.Dennehy, John.de Valera, Síle.Ellis, John.Fahey, Frank.Fitzgerald, Liam Joseph.Fitzpatrick, Dermot.Flood, Chris.Flynn, Pádraig.Gallagher, Pat the Cope.Geoghegan-Quinn, Máire.Harney, Mary.Hillery, Brian.Hilliard, Colm.Hyland, Liam.Jacob, Joe.Kelly, Laurence.Kenneally, Brendan.Kirk, Séamus.Kitt, Michael P.Kitt, Tom.Lawlor, Liam.Lenihan, Brian.Leonard, Jimmy.Lyons, Denis. |
Brennan, Séamus.Briscoe, Ben.Browne, John (Wexford).Callely Ivor.Clohessy, Peadar.Connoly, Ger.Coughlan, Mary Theresa. Martin, Micheál.McCreevy, Charlie.McDaid, Jim.McEllistrim, Tom.Molloy, Robert.Morley, P.J.Nolan, M.J.Noonan, Michael J.(Limerick West).O'Connell, John.O'Donoghue, John.O'Keeffe, Ned.O'Kennedy, Michael.O'Leary, John.O'Malley, Desmond.O'Rourke, Mary.O'Toole, Martin Joe.Power, Seán.Quill, Máirín.Reynolds, Albert.Roche, Dick.Smith, Michael.Stafford, John.Treacy, Noel.Tunney, Jim.Wallance, Dan.Wallace, Mary.Walsh, Joe.Woods, Michael.Wyse, Pearse. |
Tellers: Tá Deputies Howlin and G. O'Sullivan; Níl, Deputies Gallagher and Clohessy.
Amendment declared lost.
Amendment Nos. 22 to 24, inclusive, not moved.
I move amendment No. 25:
In page 5, subsection (6), line 22, to delete "in at least two daily newspapers" and substitute "cause notice of the grant of the licence or issue of the certificate, as the case may be, to be published in one daily newspaper".
This was already discussed with amendment No. 21.
It is such a petty thing to do, to change it from "two" to "one". What is the reason behind it? Do not tell me it is cost.
It most certainly is cost, among other things, but that is not the only change. The other change is that the decision will given inIris Oifigiúil but notice of the decision will be given in a newspaper because the decision would be very lengthy and it would add grately to the cost if the whole thing had to be set out in great detail.
This has already been discussed with amendment No. 21.
Amendment agreed to.
Amendment No. 26 not moved.
I observe that amendments Nos. 27 and 35 are related. I therefore suggest that we discus them together by agreement. Agreed? Agreed.
I move amendment No. 27:
In page 5, between lines 37 and 38, to insert the following subsection:
"(9) If representations are received by the Authority from any person to the effect that anything prohibited by this section is occurring, the Authority, unless they consider the representations to be frivolous, shall carry out an investigation. Where the Authority holds an investigation it shall report thereon to the Minister and if the finding of the Authority is to the effect that anything prohibited by this section may have been breached, the Authority may, if they consider it appropriate to do so, initiate any proceedings provided for in this Act.".
The purpose of this amendment is simply to give a role to the Authority to investigate representations made to them to the effect that this legislation is being breached on a particular occasion is being breached on a particular occasion and to give the Authority power to do something about that if, having carried out their investigation, they find that the legislation has, in fact, been breached. To leave the enforcement of this most important measure entirely in the private domain may result in a widespread abuse of the provisions of this Bill.
In many cases private individuals or small companies who might be adversely affected may not have the resources available to them to take proceedings in the High Court, with a risk of an appeal to the Supreme Court, and all that that entails. Even if they had the resources they might not be prepared to risk it. Why should they? These measures will be law and it should not be the role of private citizens to enforce them.
It would be a serious matter to have breaches of sections 4 and 6, which are crucial. I am providing a very obvious, simple attempt to remedy it. It provides that where any citizen, small company or whatever finds that the legislation is being breached and does not have resources to go to the High Court he or she may point out what they have discovered to the Authority and ask them to carry out an investigation. If the Authority decide that the complaint is frivolous they may ignore it; on the other hand, if they decide it warrants looking into they will carry out an investigation and report their findings to the Minister. If their finding is that matters prohibited by this section have been breached and that nothing is being done about it, the Authority may initiate any of the various forms of proceedings provided for in the Bill.
If we are realistic in bringing in a Competition Bill to try to control anti-competitive and concerted practices we must ask ourselves if we are being realistic and practical about it. In some cases multinational companies will have the resources and be prepared to go to the High Court and the Supreme Court to seek injuctions or to get damages. However, that category will be few and far between, for the most part the people adversely affected will be the ordinary citizens and small companies. They will not initiate proceedings in the High Court even though they might be losing quite a bit by not doing so. They just would not be able to do it as the legal aid resources are laughable and would be of no help to a person in that position. Will we bring in a law just for the look of the thing? The practicality of enforcing it has not been addressed and, apart from the case of the big multinationals or companies who might be adversely affected, the only other occasional case is where the Minister might decide to go to the High Court for a breach of the Bill. Those kinds of cases would be few and far between, indeed it is very unlikely that such cases would be reluctant to become involved in that kind of investigation even if he had the resources. His Department probably do not have such resources in these days of cutbacks.
We must try to devise some likely method under which the Bill will be shown the respect it deserves when enacted. The only way to do that is to say that the Authority are the experts in this line of country and that where it is obvious a breach has taken place they will be empowered to ensure that the Bill is complied with on foot of complaints made to them.
I support everything Deputy Taylor said. In relation to two previous amendments the Minister referred to the cost as being a reason for not doing things. However, apparently he does not have the same concern for the people affected by this legislation. When we debeated the first amendment to the Bill a week ago we pointed out the horrendous cost associated with an individual or a small firm in seeing that this Bill is complied with because their only recourse is to the High Court. I do not know the costs involved in going to the High Court but I am sure they are very sustantial and far beyond the means of an ordinary small trader, enterprise or individual. The Minister should show the same concern for the people affected by this legislation in regard to costs as he showed in relation to the cost of putting an advertisement in the newspaper. I support this amendment.
I am surprised to hear that from Deputy Barry because he spent a lot of this debate telling us that there was too much enforcement in the Bill and that everybody was on the backs of small traders and so on. If his amendment was accepted an incredible scenario would be generated because any member of the public, according to this amendment, would be able to make a complaint to the Authority. If that happened the Authority, unless they considered the representations to be frivolous, shall carry out an investigation. If any evidence were disclosed they would then be expected to take proceedings. The Deputy did not say whether those proceedings would be civil or criminal, the only proceedings provided for in this Bill are civil and it would be very difficult for someone else. There is a provision that, in certain instances, the Minister may do that but it would be very hard to do it otherwise.
I invite Deputies Barry and Taylor to consider whether they think it appropriate that any member of the public — there are three and a half million people in the country — including competitors of the company concerned could go to the Authority and make a request. As long as they could show they were serious and that it was not just a vaxatious, frivolous matter the Authority would be compelled by this, if it was law, to hold an investigation. That would be totally unreasonable and most unfair to companies who may be acting in the best of good faith. It would be most unreasonable to allow their direct competitors, who have a vested interest in trying to put them out of business, to compel the Authority to hold a major inquiry on their request. That would be gross over-enforcement and it would be very unfair to the company concerned. I am sure that when the Deputies reflect on the matter they will not proceed with the amendment.
One thing is sure, without this amendment being written into the Bill there will be gross under-enforcement, indeed non-enforcement, because there will be nobody around to enforce it. Will the Minister enlighten the House in relation to who will enforce it?
I am not talking about a major inquiry, my amendment does not say that. It says the Authority can carry out an investigation; they will have officers who can make the inquiries and investigations and if they find that the Act has been breached they may —"may" is the word I used advisedly, not "shall"— bring proceedings open to them under the Bill. Is the Minister content that the Bill should be breached? Is he happy about the fact that companies may look askance on what he is introducing in the Bill? Does he not care whether it is enforced? Would he agree that if an officer of the Authority on carrying out an investigation finds that the legislation has been breached something ought to be done about it? The Minister has said that the Authority will find it difficult to initiate proceedings, but where is the difficulty? There is none.
In section 6 he lays out the remedies that will be open to an aggrieved person and these include an injuction. What will there be to stop the Authority from obtaning an injuction? A private individual will be able to seek one.
As we are all aware, justice like the Ritz Hotel is open to everyone. If, as a result of a concerted practice, 5p is added to the price of a gallon of petrol, who will take it upon themselves to go to the High Court with all the risks that involves? If we are realists, we should not bring in legislation unless there is a reasonable prospect that it will be enforced and observed. There is no point setting up an authority if they are going to sit back in their armchairs and adjudicate on licence and exemption applications. They will have to be prepared to do more than that if they are to be worth their salt. Members of the public and small companies will require official assistance if the Bill is to have any effect in many cases.
Is do not think the Bill will produce any incredible scenarios. If people are affected by unfair and concerted practices and anti-competitive measures and if no one in authority bothers about it, that will be an incredible scenario. Unwarranted and unfounded complaints may be made to the Authority. Unwarranted complaints have been made against the Garda Síochána from time to time, but that is no reason for saying one should not have that right.
I worded the amendment extremely carefully. If the Authority come to the conclusion that a complaint is unwarranted or frivolous they need not do anything about it, but if they decide there is something to it, they will send out one of their officers to check it. If he finds that no action is warranted, that should be the end of the matter but, on the other hand, if he finds that there is something to it the House will be secure in the knowledge that the ordinary members of the public will be protected.
The Bill seeks to provide protection for substantial traders but we do not need to worry about them as they are well able to look after themselves. They will be in a position to go to the High Court but the ordinary citizen and the small trader will require, as always, the assistance of one of the State agencies in securing the protection being granted to them under this Bill. Having regard to the absence of a proper legal aid system the only way this can be done is to give an enforcement role of some description to the Authority in a careful, modulated way. That is what I am attempting to do in this amendment. It is essential that this amendment be accepted if the Bill is to protect the small trader. If it is not accepted, there will be no practical effective remedy open to him if he is kicked in the teeth by unscrupulous people who disregard the Bill.
I agree with most of what Deputy Taylor has said. The Minister is being unfair in not giving much thought to the amendments. People are concerned that the only person who will be able to intiate an investigation will be the Minister and that the Authority will not have the power to do so. It is conceivable that at some stage the Minister will be asked to request the Authority to initiate an investigation into an unfair practice, but the Minister of the day may prefer, for political reasons, not to do so.
It is odd that the Minister referred to the question of cost because if an individual or an undertaking object to the granting of a licence, they will be able to bring the matter to the High Court. All Deputy Taylor is seeking to do is to ensure that an individaual who belivies that the conditions attached to a licence issued are not being complied with, will be allowed to take the matter to the High Court in the same way as a firm who object to the Authority granting a licence or an exemption will be able to take a matter to that court. It is perfectly reasonable that an individual or small company who has been wronged should be able to go to the Authority pointing out that the conditions attached to a licence issued to firm X 12 months previouly are not being complied with and to ask them what they are going to do about it. In those circumstances the Authority should be given the power to intiate an investigation into the complaint.
There is a danger that this legislation will be over-politicised having regard to the fact that the Authority will be able to invite the Minister only to make a submission or give his observations in relation to an application for a licence. However, if Deputy Taylor's amendment is accepted, persons other than the Minister will be able to seek an investigation into anti-competitive practices. The Minister should be well aware of the dangers of relying too much on Ministers to initiate inquiries. I would ask him therefore to consider accepting an amendment which would give the Authority the power to initiate an investigation into any matter.
I do not think it is necessary to add very much to what I have said, which is perfectly valid. It has not been controverted in any way. It would be impossible to allow a competitor to come in at the drop of a hat and cause an investigation to be held into the affairs of a competitor. This would result in people being put out of business unfairly, unnecessarily and inappropriately.
I would point out to Deputy Hogan that we are still discussing section 4 and that the investigation only relates to the matters referred to in the section and not to some of the matters mentioned by him. The Minister's power to ask the Authority to hold an investigation relates to the question of the abuse of the dominant position and not to the question of any competitive practices. It does not seem appropriate that one should need to hold an inquiry into anti-competitive practices because the remedy is there without resort to any Minister or the Authority. The remedy is in the hands of the aggrieved party to take proceedings. They have never had that remedy before and I think it is a valuable asset that they have it now.
How stands the amendment now, Deputy Taylor?
I am pressing it.
Amendment put and declared lost.
Section 4, as amended, agreed to.
SECTION 5.
Amendment No. 28 is in the name of Deputy Barry. I observe that amendments Nos. 29 and 30 are alternatives and amendment No. 32 is related. I suggest, therefore, that we discuss amendments Nos. 28, 29, 30 and 32 together by agreement. Is that agreed? Agreed.
I move amendment No. 28:
In page 5, lines 38 to 40, to delete subsection (1) and substitute the following:
(1) Any abuse by one or more undertakings of a dominant position within the State shall be prohibited in so far as it may affect trade.".
I think the wording of my amendment is clearer than the wording of the original text in section 5 (1) and of the Minister's draft amendment. My wording is as close as I can get to the wording in the EC Directive. As I have said on a number of occasions, the closer the wording is to the wording of EC Directives and documents flowing from it, the more acceptable it is to the commercial community as well as to the court who will have the guidelines on which to act.
In amendment No. 32 I propose to delete section 5 (2) (b) which states "limiting production, markets or other technical developments to the prejudice of consumers;". I have taken out the word "other" because I do not think it is necessary. My amendment is really a drafting amendment rather than an amendment of philosophical substance.
The amendments in my name, amendments Nos. 29 and 30, clarify the wording that is needed, particularly by reference to Article 86 of the Treaty of Rome. I think they are more suitable than amendment No. 28. It is important for the sake of consistency with Article 86 of the Treaty that in appropriate cases the wording used be as close to the Treaty as possible and, therefore, it is necessary that the words "or in a substantial part of the State" be included. It is important for the efficacy of the new system that it applies to all undertakings, not just those operating at national level in the country as a whole. A dominant undertaking in a regional market may be in a position to damage competition in that same market and should not be left free to do so. The subsection including the two amendments in my name, if accepted, would then read as follows:
Any abuse by one or more undertakings of a dominant position in trade for any goods or services in the State or in a substantial part of the State is prohibited.
This wording is different from that in section 4 which refers to any part of the State rather than a "substantial" part of the State. A choice had to be made in respect of the wording of section 4 because the precise text of Article 85 referred to the Common Market whereas there is no real option in regard to the wording of section 5.
Would the Minister repeat what he has just said as I do not understand the point he is making.
The wording is different from the wording in section 4 because that refers to any part of the State rather than to a substantial part of the State. The reason that section 4 had to be changed from the wording in the Treaty was that it was referring to trade in the Common Market and trade between member states with a view to achieving the Common Market, and that does not apply in section 5. That is why the wording is different. The words "a substantial part of" appear there because they appear in Article 86.
I do not follow that argument at all. I beg your pardon were you finished?
I had finished on that point but I was going to refer to amendment No. 32 which deletes the word "other" in section 5 (2) (b); that seems to be acceptable and is in line with Article 86. It also puts the word "development" in the singular and I have no objection to those changes. I would be quite happy to accept amendment No. 32 in Deputy Barry's name.
I am becoming more and more confused. The Minister can accept amendment No. 32 in my name because the wording is taken from the Treaty of the European Community. Who decides that the word "other" should be put in and that the word "developments" was in the plural? It seems an extraordinary waste of the time of the parliamentary draftsman and Members of this House. However, to get back to the more substantial matter, I do not understand the reason for the reference to a "substantial part of the State". It appears to me that the intention is quite different in the EC where we are talking about trade between member states and, therefore, the reference to "a substantial part of the State" must apply because there could be a distortion of competition between the northern part of Italy and the western part of France and in that case you would be talking about a substantial part of the state in the Community. If there is an abuse of the dominant position in part of the country, whether it is Tralee, Dublin or Cork, it is within the State and we do not need to qualify it further with the words "a substantial part of the State". The offence is committed within the state and the words "in a substantial part of the State" are superfluous.
There is no need to carry that blindly from the Treaty and we have not done it in other instances where the application is totally different. It is necessary in the European context to refer to the dominant position in a substantial part of the State where one is talking about inter-state trade but in this context we are not talking about inter-state trade and if there is an abuse of a dominant position in the State we do not have to say it is in a substantial part of the state or the State itself because the offence is the same under this law which applies to all the State.
Deputy Barry appears not to understand what the section intends and proposes and what Article 86 also makes clear. We have to distinguish between an undertaking which has a dominant position in trade or services in the State and an undertaking which has a dominant position in trade or services in a substantial part of the State. Let us take an example nearest Deputy Barry's heart.
I was about to ask the Minister not to do that.
Cork people always take examples of Cork because Cork, like Mecca, is the centre of many people's lives. If Deputy Barry were dominant in tea in Minister——
Being a member of Fine Gael, of course I would not abuse that position.
——and if, God forbid, he were to abuse that dominant position, it would not be possible to take any action if we did not have in the section the words "in a substantial part of the State". He could say he was not dominant in that trade in the State because he did not trade significantly in the other three provinces. It would be wrong if he were to get out of it on that basis. We are talking about dominance in the State or in a substantial part of the State. It is defined in that way in order to avoid a situation where somebody could be accused of abusing a dominant position in a very small part of the State, let us say a small town in west Cork. It would be unreasonable to subject somebody whose geographical area of activity was very small to these kinds of rules. The section does not apply to somebody who is dominant in only a small part of the State.
The wording of this subsection will give rise to inordinate difficulties of interpretation. There will be a field day in the courts and many a long day and week will be spent in the High Court and the Supreme Court arguing what is a substantial part of this State. The parliamentary draftsman could have done a better job in this case. Let us take the example given by the Minister.
Could the Deputy not take an example of Deputy Hogan and the absence of hair oil?
I am following what was initiated by the Minister. If Deputy Barry were dominant in the tea trade in Munster and were abusing that position, would he contravene the Bill? Is Minister a substantial part of the State within the meaning of the subsection? It is open to argument. What proportion of the State is Minister? How does it compare with the State as a whole as to land area and population? Perhaps it represents a quarter of the State. Would dominance in a quarter of the State be a substantial part? I do not think so but I could be entirely wrong. My view is that a court would not hold that dominance in one quarter of the State would represent dominance in a substantial part of the State. What proportion would have to be involved to contravene this section? It is woolly and vague. There may be difficulty in trying to make it more specific, but some attempt should be made. Otherwise there will be lengthy argument in the High Court and Supreme Court. Why should we allow that to happen when legislation is at the formative stage?
When the Minister excludes the words "in any part of the State" and puts in the words "a substantial part of the State" he is saying in effect that in an insubstantial part of the State—let us say a county or half a county, leaving aside Dublin — it is in order not only to have a dominant position in a trade or service but it is also in order to abuse it. The basis of that argument would be that the abuse of the dominant position is only in an insubstantial part of the State. Is the Minister saying that it is satisfactory and would not breach the Bill if there were abuse of a dominant position in an insubstantial part of the State? That would appear to be the position.
Maybe the Minister is happy with that and the Bill is not intended to cover abuse of a dominant position in an insubstantial part of the State. If it is intended to deal with it, as I think it should, then the wording used in section 4 would be better and the prohibition should apply to any part of the State without the limitation that it must take place in a substantial part of the State, whatever the courts may interpret that to mean.
We are dealing with section 5 which concerns itself with the abuse of a dominant position. Once a complaint is made to the Authority, will it take long before the Authority will act? When the Authority act and find an abuse, will it be long before the abuse is removed? I am referring to the dominant position of the ESB shops. According to the 1972 Act they are entitled to sell electrical equipment. Their trade increased substantially between 1985 and 1990. In 1985 the turnover in those shops was £9 million and in 1990 it was £44 million. Up to December 1989 televisions and video recorders were not sold in those shops but between January 1990 and March 1991——
The contribution the Deputy has heralded would be appropriate to the section. I am not too sure it is appropriate to the amendments we are discussing. Could we ask that you reserve your position until then?
Until what stage exactly?
Until the amendments have been dealt with. We then put the question on the section and it is open to discuss the full section, but for the moment contributions are confined to the amendment or amendments before us.
I stand corrected.
Perhaps the Deputy can, through his ingenuity, make it appropriate, but I suggest he would have greater freedom when we are discussing the section.
I support Deputy Taylor's remarks that the courts will have a field day interpreting this legislation. "Dominant position" is not defined in the Bill either. Explaining "a very substantial part", the Minister gave as an example a dominant position in the tea market in Munster, alluding to Deputy Barry. Would that form a dominant position in a substantial part of the State? The criteria and guidelines we use are very important in defining a substantial part of the State. The County of Dublin in population terms is equivalent to Munster. Therefore, what is "a substantial part of the State"? Do we mean territorially, in population terms or what? We have no guidelines in relation to this definition. This creates further uncertainty and further wrangling which would add unnecessary costs in a court procedure. Closer alignment with the wording in the Treaty would eliminate that uncertainty.
With respect to Deputy Hogan, he is complaining that these phrases are not defined. They are all defined at great length in the decisions of the European Court and in the procedures of the Commission. They do not have to be set out here again. As I explained this morning, the relevant decisions of the court are adopted so far as this country is concerned by Statutory Instrument of 29 December 1972. They have been argued before the European Court on innumerable occasions and they have been defined and refined there. That is the advantage of using this kind of phraseology, because it has been defined so frequently and it is well known to lawyers and traders who have had to deal with it so often.
I think the Deputy would like some kind of definition expressed in percentage terms or something of that kind. In the 1978 Act we made the mistake of trying to define "monopoly" in percentage terms, and it was a very foolish move. I know from my experience in the past two years just how foolish it was, because somebody felt he was entitled to ride roughshod over everyone in this country and over the public authorities simply because he was, in percentage terms, just below the statutorily defined monopoly figure, even though he had a monopoly. He had what would in terms of this Bill be called the dominant position.
The dominant position is defined in so far as it relates to each trade and each sector and, of course, it will very greatly. Similarly in regard to geographical areas as to what is a substantial part and so on, that, again, will vary according to each trade. If you were to set out a requirement that you had to be dominant or trading in a particular number of counties in Ireland, you could not apply that definition to everything as Deputy Hogan would wish. In many counties there is no trade in certain matters and there is no provision of certain services.
While you might say in the definition section that one county was insubstantial, when it comes to Dublin that one county and city alone constitute in population terms one third of the country. Therefore, to claim that one county is an insubstantial part would immediately run you into serious difficulty. That is why it is better to leave it to the kind of definitions that have been worked out over the last 35 years in the European Court which meet these kinds of circumstances and are adaptable to each type of case.
"A substantial part" is not included.
"Dominant position", which is a very well known concept and has been for 35 years, is not defined in the Treaty of Rome but that has not stopped them clearly identifying dominant positions or stopping the abuse of those dominant positions throughout the EC during that period.
I am still not happy with the Minister's clarification of "a substantial part". That is not enshrined in any European legislation as far as I am aware. Maybe I am wrong. Maybe the Minister can give some indication of how the Authority would deal with the phrase "a substantial part". I am still not satisfied that the words "a substantial part" are essential to the section and that all options are covered, whether in terms of population or geographic area. By leaving it out altogether every option is covered. I think it is an unnecessary insertion into the Bill and I am far from convinced from the Minister's statement that he is aware of what the definition of "a substantial part" in terms of population or geographic area is. I am happy enough with his clarification on "dominant position" but "a substantial part" has me very confused.
The phrase is used in the opening paragraph of Article 86 and it has been defined time and time again in the Community Courts. I do not think it should give rise to too much difficulty.
B'fhéidir go bhfuil sé am an cheist a chur. Chuirfidh mé an cheist.
Question: "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
I move amendment No. 29:
In page 5, subsection (1), line 39, to delete "in the State or in a substantial part of the State".
Is the amendment agreed?
It is, but I agree with Deputy Taylor that there will be many problems when this comes to the courts in future. People will pay a great deal of money to find out whether they are trading in a substantial part of the State.
Amendment agreed to.
I move amendment No. 30:
In page 5, subsection (1), line 40, after "services" to insert "in the State or in a substantial part of the State".
Amendment agreed to.
Amendment No. 31 in the name of Deputy Rabbitte. Amendments Nos. 33 and 34 are related. I propose, therefore, for discussion purposes, to take amendments Nos. 31, 33 and 34 together. Is that agreed? Agreed.
I move amendment No. 31:
In page 5, subsection (2), between lines 42 and 43, to insert the following:
"(a) below cost selling where it is considered to be tantamount to unfair trading,".
Section 5 sets out to list the particular areas that would constitute an abuse of a dominant position and the Minister may argue that subsection (2) (a) caters for the import of my amendment. I am of the view that it is still necessary to specifically advert to the particular abuse of below cost selling. It is necessary to include as an example of abuse of a dominant position expressly in the Bill this form of manipulation of sources of supply. I say that because the Minister has stated in respect of discussions we have had on other amendments that 99 per cent of companies would not find themselves in this situation. We are talking here not merely about a company that has a dominant position but a company that is engaged in abuse of that dominant position.
Below cost selling is a form of abuse that we encounter from time to time. We have so encountered it in recent times with adverse implications for employment, manipulation of the market to the detriment of people working elsewhere; people have been put out of work in the bakery trade and unquestionably this device is used, for example, in the grocery business by the large multiples who can afford to take a loss in a particular product in order to squeeze the market unfairly to affect small businesses who may be relying on that product or suppliers who are forced to produce it at a manifestly uncompetitive price. I am of the view that this matter ought to be expressly provided for in the Bill.
The Minister has not given us any commitment in respect of the restrictive practices order in the grocery trade. If I recall correctly, he said that depending on what comes out of the investigation it may well be that it would be continued, albeit amended. That, presumably, is still the position. Generally speaking, those who work in the trade and who are similarly concerned are anxious that it continue to apply in some fashion or another. The position would be strengthened if the Minister were prepared to take this amendment on board.
Amendment No. 33 in my name is also on the same lines, though more extensive than that of Deputy Rabbitte and for that reason I support what Deputy Rabbitte has said. When we discussed amendment No. 3 or 4 the Minister said that his amendment No. 1 was intended to keep the situation frozen until he sees the result of the Fair Trade Commission's report on the grocery trade which is due during the summer. He will then consider what action he should take. If he wants to amend that order it will come before the House and if he just wants to negative it, it need not come before the House. This would result in the type of chaos and the job losses we saw a few years ago before the introduction of that order in 1987. I do not have to remind the House of the type of activities engaged in at that time where one supermarket chain went out of existence. Some people attempted to make the argument at that stage that this was the result of competition and that when the kitchen got too hot they could not stand the heat. Nobody would argue with that if the heat remained inside the kitchen after that but what happened was that that man invested money in a chain of supermarkets. He was engaged in a very severe form of under-cost selling with another much bigger and much stronger competitior and he lost the battle and his money. He was not the only person who lost out; the supplier to that company also lost out. It is winding to a close now as to how much will be paid. Many suppliers to that chain of supermarket companies lost considerably and their employees lost their jobs as a result.
And their pensions.
Their pensions were lost also. Many of the smaller suppliers to that chain of supermarkets have all gone out of business and their employees have lost their jobs. One cannot look at it coldly and say it is A v. B and there will be no consequences if A loses. There are other consequences down the road. I understand that as a result of the liquidation of the supermarket chain the payment of the creditors will be somewhere in the region of 10p in the pound. There are considerable financial losses to the suppliers of that company, and as Deputy Rabbitte said, the employees of that company not only lost their jobs but their pensions.
Nobody wishes to ban under-cost selling in areas where it is clearly necessary, for example, in the area of fresh fruit and vegetables. A trader must get rid of such goods if they are in danger of being held too long but that is not what we are talking about here. What I am talking about can be summed up in my amendment No. 33 (3) (b) which states:
In examining `below cost selling' of an `unfair trading' nature [that is the kernel of my amendment] the Authority must have regard among other aspects not only to the interests of consumers at the point in time in question...
It was clearly in the interests of the consumer at the point in time in question when the supermarket, to which I have referred, went into liquidation in 1987, because cheap prices were available in both supermarkets for a limited period. That was not the situation afterwards. Amendment No. 33 (3) (b) continues as follows:
...but also to the likely state and development of competition and the future interests of consumers as the consequences of `below cost selling' are experienced over a reasonable time horizon.
If you have two firms engaged in a war of prices and if one goes into liquidation and ultimately goes out of business then one would want to be rather naive to expect that prices would remain at that level or even at the level at which both were selling prior to the commencement of the price war in the future. I am asking that the Authority examine not only the effect on consumer prices at the time of the below cost selling incident but also in the future to see whether the elimination of one competitor will be in the long term interests of the consumer, and clearly to my mind it will not be.
There is also the case of a particular product where a supermarket chain would carry thousands of lines, broken up into different departments. One of those departments decides to deliberately engage in below cost selling against a much smaller specialised competitor and put him out of business, for example, an off sales wine merchant next door to a big supermarket in any part of the country. The supermarket chain cuts the price of a range of goods. It has been said and has been generally accepted that most customers remember only the prices. of 20, 25 or 30 items. When the supermarket chain cuts the prices of perhaps 25 of the more popular lines in their store and draws the trade away from the specialist off-licence merchant next door in the high sales period of, say, mid-November to Christmas, the result is that if that goes on for two or three years the off licence will have to close down and the supermarket chain will get all the trade in that area for that product and will not continue to sell at those predator prices but will put the prices up to a marginal return to the supermarket chain in excess of what they could do if they had the competition.
The Minister is professing to encourage competition by not banning below price selling but what he is doing in the long term is eliminating competition. Even though there may be some short term benefits from this, it is not, as they say, the life of trade or in the long term interests of consumers.
I also propose that in examining below cost selling activities the Authority should have regard to competition within the sector in which the supplier and/or retailer exists. At Question Time about a month ago and again on an earlier section today, the Minister said that if the supplier to a supermarket chain is being damaged he has recourse to the High Court. I could refer to other examples but this is the one which is most often in the public eye. The option of going to the High Court so that the abuse of a dominant position by a supermarket chain can be redressed is not an option open to suppliers except on paper. In the real world suppliers cannot do this. Deputy Taylor scoffed at me earlier when I referred to a half day in the High Court. He was probably right, there is no such thing as a half day in the High Court. A case will usually be in the High Court for three days and will be extremely expensive. A small supplier to a big chain will certainly not be in a position from a financial point of view to take a supermarket chain to which he is supplying goods to court on the grounds that they are abusing their dominant position. If he wins the case he will be congratulated on doing a great job but will be told by the supermarket chain not to ring them. In other words, he will lose his customers. Therefore, this is not a real option open to suppliers.
I also propose that the Authority examine the implications for suppliers and/or retailers specialising in a product or product grouping subject to below cost selling. This is the point I was making in regard to the abuse of a dominant position by a supermarket chain. If, say, they adopt as a predatory price practice in regard to specialised items such as spirits, they would wipe out off-licences and that would not be in the long term interests of consumers.
This area has been a matter of much public debate for many years. There is a legitimate volume of opinion, though I do not agree with it, that large supermarkets should be let at one another — let the best dog jump the ditch, let the strongest man win, etc., are the sort of clichés which are trotted out. That appears to be an attractive option on the surface and in the consumers' interest but it would not be so in reality. If this Competition Bill genuinely deals with competition, it must encourage competition. I agree with the points made earlier by the Minister in this regard. On, I think, Second Stage the Minister said that America and Germany are two very good examples of countries where competition is encouraged. These countries have legislation which ensures that competition is open and that there is genuine competition between enterprises. I strongly support that objective.
Articles 85 and 86 of the Treaty of Rome provide that part of the objective of the competition policy of the European Community must be to ensure that competition is fair, is not used for predatory purpose and that a strong dominant position in the marketplace is not used to wipe out competitors. This should be part of our concern also. We must ensure that the legislation we pass will be in the long term interests of the consumer and that unfair practices in trading such as price rigging to keep prices up are forbidden and prohibited. We must also ensure that unfair trading where one supplier to a market abuses his dominant position by undercutting prices or entering into agreements with other suppliers to the extent that other competitors or potential competitors are wiped out is also prohibited. This is as much a part of competition policy as the other matters we debated previously. When we talk about competition it is important that we do not talk only about competition in prices and services. We also need to ensure that competition does not allow unfair trading in any respect.
I support Deputy Barry's amendment No. 33 which deals with below cost selling. As Deputy Barry said, there have been many inquiries and public statements about the abuse of a dominant position by large supermarket chains and the effect this has on small shopkeepers involved in the same trade.
It is very important that we look at the effects of this practice on competition in the long term. I believe in a society where consumers get the best value for money and the best service possible. However, over the past number of years larger firms have tended to reduce their prices at certain times of the year when consumers are willing to spend money, for example, Christmas time or summer time. Small shopkeepers are left in the position that they cannot compete with these larger shops. If this practice is allowed to continue, small shopkeepers will be put out of business and the larger stores will have a monopoly in the market, thus enabling them to increase their prices again.
This also has a knock-on effect on employment. We have to take into account the unemployment crisis in Ireland. The Taoiseach does not seem to believe there is any crisis in regard to unemployment but I think most people would agree that our main objective should be the provision and maintenance of jobs. If the problem of below cost selling is not tackled, our level of unemployment will continue to rise. As I have said, larger firms only keep prices down for as long as it suits them and when their competitors are forced out of business they increase their prices. This is not in the best interests of consumers or of the country generally.
I, too, support Deputy Barry's amendment. Unfair practices in trading are unjust and uncalled for. Below cost selling has put many family grocers out of business. The large combines which are selling below cost are throwing a sprat to catch a mackerel — when one examines the prices they charge for many other products they are as dear as those charged by family grocers. They reduce the price of certain products each week in order to attract customers and in this way they wipe out small grocers in rural villages and towns.
I have seen in the past decade the demise of the family grocer. Everybody knows that that individual employed perhaps one or two of his own family and in certain cases two or three other people but that tradition has been completely demolished by those who have been given an opportunity of below cost selling. That is unfair and is a threat to society. It is not in the interests of the housewives who buy those products or of any of the people concerned. It only impedes the creation of jobs, which is of primary importance at present when there are about 250,000 people unemployed. The supermarkets with all their latest gimmicks should be confined to selling their products at a reasonable price, and under no circumstances should the Minister allow them to sell below cost. I hope he will take steps in this Bill to prevent that threat to society. I appeal to him that the housewives be advised to buy Irish products in preference to those mass produced overseas, thereby creating more jobs at home.
Amendment put.
The Committee divided: Tá, 55; Níl, 69.
Tá
- Allen, Bernard.
- Barnes, Monica.
- Barry, Peter.
- Belton, Louis J.
- Boylan, Andrew.
- Bradford, Paul.
- Browne, John (Carlow-Kilkenny).
- Byrne, Eric.
- Connaughton, Paul.
- Cosgrave, Michael Joe.
- Cotter, Bill.
- Creed, Michael.
- Crowley, Frank.
- Currie, Austin.
- D'Arcy, Michael.
- Deasy, Austin.
- Deenihan, Jimmy.
- Doyle, Joe.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- Finucane, Michael.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Charles.
- Foxe, Tom.
- Harte, Paddy.
- Higgins, Jim.
- Higgins, Michael D.
- Hogan, Philip.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kenny, Enda.
- Lowry, Michael.
- McCartan, Pat.
- McCormack, Pádraic.
- McGahon, Brendan.
- McGinley, Dinny.
- Mac Giolla, Tomás.
- Mitchell, Gay.
- Moynihan, Michael.
- Noonan, Michael.
- (Limerick East).
- O'Brien, Fergus.
- O'Keeffe, Jim.
- O'Sullivan, Gerry.
- O'Sullivan, Toddy.
- Rabbitte, Pat.
- Reynolds, Gerry.
- Sheehan, Patrick J.
- Sherlock, Joe.
- Taylor, Mervyn.
- Taylor-Quinn, Madeleine.
- Timmins, Godfrey.
- Yates, Ivan.
Níl
- Ahern, Dermot.
- Ahern, Michael.
- Andrews, David.
- Barrett, Michael.
- Brady, Gerard.
- Brennan, Mattie.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John (Wexford).
- Callely, Ivor.
- Clohessy, Peadar.
- Connolly, Ger.
- Coughlan, Mary Theresa.
- Cowen, Brian.
- Cullimore, Séamus.
- Daly, Brendan.
- Davern, Noel.
- Dempsey, Noel.
- Dennehy, John.
- de Valera, Síle.
- Ellis, John.
- Fahey, Frank.
- Fitzgerald, Liam Joseph.
- Fitzpatrick, Dermot.
- Flood, Chris.
- Flynn, Pádraig.
- Gallagher, Pat the Cope.
- Geoghegan-Quinn, Máire.
- Harney, Mary.
- Hillery, Brian.
- Hilliard, Colm.
- Hyland, Liam.
- Jacob, Joe.
- Walsh, Joe.
- Wilson, John P.
- Kelly, Laurence.
- Kenneally, Brendan.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Leonard, Jimmy.
- Martin, Micheál.
- McCreevy, Charlie.
- McDaid, Jim.
- McEllistrim, Tom.
- Molloy, Robert.
- Morley, P. J.
- Nolan, M.J.
- Noonan, Michael J.
- (Limerick West).
- O'Connell, John.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Keeffe, Ned.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- O'Rourke, Mary.
- Power, Seán.
- Quill, Máirín.
- Reynolds, Albert.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Mary.
- Woods, Michael.
- Wyse, Pearse.
Tellers: Tá, Deputies Byrne and McCartan; Níl, Deputies Gallagher and Clohessy.
Amendment declared lost.
Amendment No. 32 is in the name of Deputy Peter Barry and has already been discussed with amendment No. 28. I recollect that the Minister indicated earlier that he would accept this amendment.
Yes.
I move amendment No. 32:
In page 5, subsection (2), lines 45 and 46, to delete paragraph (b) and substitute the following:
"(b) limiting production, markets or technical development to the prejudice of consumers;".
Amendment agreed to.
Amendment No. 33 in the name of Deputy Peter Barry has already been discussed with amendment No. 31.
I move amendment No. 33:
In page 6, between lines 3 and 4, to insert the following subsection:
"(3) (a) `Below cost selling' which constitutes unfair trading is to be considered an abuse of a dominant position.
(b) In examining `below cost selling' of an `unfair trading' nature the Authority must have regard among 1other aspects not only to the interests of consumers at the point in time in question, but also to the likely state and development of competition and the future interests of consumers as the consequences of `below cost selling' are experienced over a reasonable time horizon.
(c) In examining `below cost selling' activities the Authority must have regard to the following:
(i) competition within the sector in which the supplier and/or retailer exists,
(ii) the implications for suppliers and/or retailers specialising in the product or product grouping subject to `below cost selling',
(iii) The immediate and longer term likely impact of below cost selling activities on prices and service (including hours of opening) across the product and product grouping subject to below cost selling and across the range of products and product groupings supplied and/or retailed by the undertaking engaging in `below cost selling' activities.".
Earlier on I talked of the necessity to include a provision in the Bill that would prohibit unfair practices. A circular letter from Stock Electricals calledThe National Campaign for a Fair Deal in Electrical Retailing was released earlier this week. I am sure that the Minister is familiar with the contents of that letter. If the facts contained in the letter are correct then it seems that it would constitute unfair trading. The Minister gave an undertaking when the Bill was previously discussed that the ESB would be subject to the conditions of the Bill. If the Minister is not familiar with the contents of the letter, then I do not want to unnecessarily delay the time of the Committee, but if he is familiar with the details perhaps he could tell me whether or not that involves unfair trading.
Amendment No. 33 has already been discussed with amendment No. 31.
I should be glad to deal with that matter. Although the issue has been mentioned by Deputy Barry it was previously raised by Deputy Foxe earlier in the debate. At the time the Chair said that the point being made was relevant to the section rather than to the amendment under discussion, which concerned a specific matter. It was then agreed to leave discussion until debate on the section. In fairness to Deputy Foxe, I think that he should be allowed to refer to the issue again when the section is reached. I shall deal with the topic then.
The section will be reached shortly. There are three more amendments to be dealt with but all of them have already been discussed.
The matter is subject to the ruling of the Chair, of course, but the issue would have probably been more relevant to my amendment, amendment No. 33, than to the amendment of Deputy Rabbitte, amendment No. 31. If there is agreement to discuss the matter when the adoption of the section is proposed, then I am quite happy to do that.
May I take it, Deputy Barry, that amendment No. 33 is now withdrawn?
Yes.
Amendment, by leave, withdrawn.
And amendment No. 34, which has already been discussed?
No, that is a little different.
Amendment No. 34 was discussed earlier with amendment No. 31.
I move amendment No. 34:
In page 6, between lines 3 and 4, to insert the following subsection:
"(3) Abuse of a dominant position may also be manifested as market sharing and/or manipulating sources of supply.".
This has already been discussed with amendment No. 31.
I just want to make a point which I failed to make when discussing the earlier amendments. The intention behind amendment No. 34 is to cover a store or a supplier who will accept goods at a certain price provided one does not supply anyone else in that neighbourhood or, to go back to something that we were disputing earlier, in a substantial part of the State. That would constitute unfair trading.
There was an example of this last month when one large supermarket chain failed to get supplies of milk because there were conditions attached to supplying milk to them. One cannot tell a supermarket store we will only supply our product if it is sold at a certain price. That is one of the things my amendment No. 34 would seek to prohibit.
The other thing my amendment seeks to cover is something that was quite common some time ago but is not quite so common now, that is what was known as "hello money". That was prohibited under the Grocery Order, 1987. Before that prohibition, suppliers could only get their goods on the shelves of department stores or supermarket chains if they made what was called a contribution towards shelf space or "hello money". This Bill is concerned about promoting competition but it should also promote fair trading with regard to retailing.
Let us bear in mind that this amendment was already discussed with amendment No. 31.
What the Deputy is trying to get at is largely covered by section 5 (2) (d). A point that should be borne in mind is that all abuses of a dominant position are prohibited. The partial list in subsection (2) is taken directly from Article 86, where the examples were given. They were given without prejudice to the generality of what goes before them. It would be unwise to add to the list in Article 86, because if we do, things that are not specifically put into the list will then come to be regarded as being not really abuses of a dominant position. That would be a pity. The beauty of the prohibition of the abuse in subsection (1) is that it is all embracing and covers every abuse of the dominant position.
Even from the point of view of the buyer or the seller?
From either point of view.
It must be in a substantial part of the State.
Yes, in the State or a substantial part of the State. I am reluctant to add to, or to agree to, others adding cases because all of us could add ten or 20 different cases if we wanted to, but the difficulty would be that the ones we do not include would then tend to be excluded. That would be wrong. It is better to have the all embracing one, and have only some generalised examples as taken from Article 86 of the Treaty.
I accept what the Minister says and in large measure I agree with it. However, we run up against the snag to which Deputy Taylor just referred in relation to "a substantial part of the State". That makes it necessary to put in another example as well. Some time earlier in the afternoon I gave the example of a supermarket chain in a country town putting an off-licence out of business. That could hardly be described as a substantial part of the State but it is unfair trading under the sort of definition I am talking about here. I am not sure if that situation is catered for because of the conditionality attached to the words "in a substantial part of the State" and I am not sure if the Authority can deal with it for that reason. If the Minister gives me an assurance that they can do so, I will withdraw my amendment.
Perhaps I am under a misapprehension here, but it seems that even if one included in subsection (2) some additional items, such as below cost selling, they would be of no value unless it was being carried on in a substantial part of the State. If one includes an additional item under subsection (2), there seems to be some impression that it would be caught even if it was in an insubstantial part of the State. That is not so because if one looks at subsection (2) carefully it is really only a definition of the word "abuse". For anything to be caught by subsection (2) one first must come within the ambit of subsection (1) which is that the abuse of the dominant position must take place either in the entirely of the State or in a substantial part of the State. If it does not, then whether one is contravening paragraph (a), (b), (c) or (d) does not matter. It does not make any difference because it is only a definition of the word "abuse". If any of those things that are being spoken about were occuring in what was not a substantial part of the State, that would be all right because the section as a whole would not control it.
If you are right, that dismantles the whole Act.
That is the very point I have been trying to make. Maybe I am misinterpreting the case. I do not profess to be the last word on it, but it strikes me that subsection (1) is the defining section and that quite clearly says it must be in the State or in a substantial part of the State. Then it says:
without prejudice to the generality of subsection (1), such abuse...
"Abuse" is the word referred to in subsection (1). That is giving particularity as to what the abuse may be. That is all it does. It does not say that any of those items, if contravened in a small part of the State would be caught by that section as a whole. I do not think it would, but perhaps I am wrong. I do not know whether the Minister would agree with that view.
If it simply happened between two people, or two firms it is not necessarily caught. If it is a purely localised, almost personalised thing, it would not be caught, but it would not really be a dominant position in those circumstances. It would simply be competition between two people.
That is what I am saying.
If there is any agreement or concerted practice, arrangement or whatever else to do this, it would be in breach of the earlier section.
The Minister's remarks are slightly disturbing. I referred earlier to a supermarket war about three or four years ago which gave rise to the 1987 order by the Minister banning low cost selling and the effect it has on the firm, creditors and employees. However, it appears from what the Minister said that because this did not take place in a substantial part of the State, it would not be caught under this Bill.
Or by the section.
The Deputy is not just talking about two shops having a competitive row with one another. He is talking about two chains, which is different.
Unfortunately, it is not between two chains, it is between a smallish chain in a particular part of the State, Dublin, being taken on by a much bigger store in that area. I am not familiar with the location of those stores but I think they were confined to the south side of Dublin. It certainly could not be defined as a substantial part of the State, but the effects were the same on the creditors and the employees of the company involved.
The battleground, as it were, for this war was Dublin, and Dublin, whether we like it or not, must be regarded as a substantial part of the State as it constitutes one third of the population. We were told earlier that it is bigger than Munster.
As Deputy Taylor said earlier, this will mean a bonanza when it comes to defining what it means. I am not sure whether we should pass this legislation because it will be ineffective. The lawyers will make a fortune from definitions.
It is a pleasant change for me, Sir, to be accused of helping them, I am usually accused of criticising them.
I am not sure if it is what the Minister intended or if it is an offshoot of that.
Amendment, by leave, withdrawn.
Amendment No. 35 not moved.
Question proposed: "That section 5, as amended, stand part of the Bill."
I should like to express my appreciation to the Minister for his understanding. Will he answer the two questions I raised earlier? If a complaint is lodged with the Authority how long will it take for them to act? If the Authority discovered there was an abuse, how long would it be before the abuse was removed? I ask these questions because of the actions of a particular company which in 1989 had a turnover in their shops of £9 million, and which in 1990 had increased to £44 million.
Before December 1989 the group of shops had never traded in television sets or video recorders. However, between then and March 1991 — a 15 months period — they had commanded 28 per cent of credit sales for television sets and 35 per cent of credit sales for video recorders in the whole country. That was shown in a survey carried out by Landsdowne Market Research. The same group carried out a survey over a two year period ending in March 1991, and they discovered that the same group of shops had commanded 81 per cent of the credit sales of all electric cookers, 82 per cent of all washing machines and 77 per cent of fridges and freezers in relation to credit sales over a two year period. The company to which I am referring is, of course, the ESB shops.
In addition to having commandeered such a sizeable portion of the market — 80 per cent in most credit sales — they also have the facility of being able to provide easy access to credit. The two basic questions which a customer is asked when ascertaining his or her creditworthiness is if he or she has been an ESB consumer and if the last six bills were paid. If the two answers are in the affirmative then it is a matter of filling up a form and credit is organised.
However, retailers in the same electrical business throughout the country find it difficult to get credit for anyone who wants to raise less than £500. They must also ask rather embarrassing questions of the customer regarding his weekly wage and his credit-worthiness in the bank. An ordinary person would prefer not to answer those questions and, therefore, he will not deal with local shops when he can go to the ESB shop and get credit facilities without any great problem or having to answer embarrassing questions.
The repayments to the ESB shops are facilitated by including them on the ESB bill. When the bills are sent to various consumers very often brochures are included. This system of advertising is not available to other retailers. If this continues, within the next few years there will be a complete take-over of the electrical supply trade by the ESB shops, thereby putting something in the region of 3,500 people out of work. Unemployment is bad enough as it is without helping a company in a dominant position to abuse that position to the detriment of the other people in the trade. Will the actions of that company come under this section?
The last paragraph of the "Shop Electric" document is quite appalling because it involves unfair trading. Appropriating overheads such as the allocation of a clerk's wages, half to sales and half to electricity generation, means that the branch cannot support itself out of sales revenue. The ultimate violation of monopoly by the ESB, however, must be in their abuse of the billing system. It is not possible for the ordinary business person to compete with that. I have received an ESB bill for the first time because I have become a property owner. It is grossly unfair to send an advertisement for white and electrical goods with the bill. It should not be allowed in any Competition Bill.
We should also take account of the number of jobs which will be affected. In Country Leitrim, for example, the service industry provides the largest number of jobs in the country. It is not possible to compete with the ESB outlets and this situation cannot continue. This House, and the Minister in particular who has the power to take action quickly to prevent unfair trading. If this practice continues it will have a detrimental effect on the economy and on businesses throughout the country.
Progress reported; Committee to sit again.