I understand that amendment No. 14 cannot now be moved as amendment No. 13 was negatived. I would ask the Minister to move amendment No. 15. This amendment was already discussed with amendment No. 8.
Competition Bill, 1991: Committee Stage (Resumed).
SECTION 4.
Amendment No. 14 not moved.
Before the Minister starts, may I inquire if it is necessary for me to indicate that I intend to move amendment No. 14 on Report Stage? I understand it has fallen as an alternative to amendment No. 13. Is it in order to re-enter it?
That is the Deputy's prerogative; that is quite in order.
I move amendment No. 15:
In page 4, subsection (2), to delete lines 44 to 46 and substitute the following:
"(i) impose on the undertakings concerned terms which are not indispensable to the attainment of those objectives;".
This amendment has already been discussed. I do not think it is appropriate to go into the reasons again. It is purely technical.
I do not intend to re-open this debate but I want to repeat what I said this morning about the manner in which the Minister is handling this Bill. There is absolutely no necessity for the way he is pushing this important, complex and complicated legislation through the House. As I said this morning, I received a 15 page submission this morning — I presume every other Deputy received it also — from the Incorporated Law Society. The Minister is doing no service to this House and he is doing no service to this Bill which he says is important. If it is that important then it deserves far more consideration than pushing it through the House at the speed at which he is proceeding.
I want to give him notice now that I will not agree to a rushed Report Stage. There is no necessity for what the Minister is doing. I cannot understand what prompted him to do it. He sat on the Fair Trade Commission report for 15 months without publishing it; he then published the report and the Bill at the same time. He had no consultations with anybody prior to that. I presume Deputy Taylor and Deputy Rabbitte have not had any opportunity to discuss the fine points of this Bill. The Minister is doing no service to democracy, to this House, to his own reputation or to the Bill because of the manner in which he is handling it.
I fully endorse in every respect the comments made by Deputy Barry. The reason for this unseemly pressure is inexplicable. I heard the Minister say on radio that this Bill would make some major impact into the unemployment situation and that it would be a major factor in the economy. That does not stand up. The Bill is of some importance and we should get it through obviously as quickly as we can, but that does not mean the guillotine should be applied as ruthlessly as in this instance. It is not good enough that this lengthy, complex measure be disposed of within the few remaining hours of today and there is no need for it. If there was pressure or a need for it one could understand. If the Minister thinks this Bill will make any major inroads on the 250,000 people who are unemployed I fear he will be sadly mistaken.
I agree with the comments made by Deputies Barry and Taylor. I made the same points on the last occasion. We have all been in receipt of last minute submissions from interested parties. It is a complex issue, as the Minister agrees. I am not sure whether its impact will be of the magnitude he suggested on the "News at One" programme last Sunday. It would have been appropriate that on a matter as important as this we, the Opposition, would have had an opportunity to consider the views of various interested parties irrespective of to what degree we wanted to take them on board. As I commented on the last occasion, it is especially regrettable in the context of the report published by the Fair Trade Commission that this House only became aware of the fact that the report was available on the same day as the Minister introduced the Bill.
The question before us is in respect of amendment No. 15 in the name of the Minister. It has already been discussed with amendment No. 8. Is it agreed that the amendment be made?
May I reply to the points which have been made? Whether they were relevant to the amendment they have been made. This Bill has been before the House for two months.
No.
It was presented to the House on 12 April 1991, that is two months ago. It is not a particularly long Bill. Some of the concepts involved are different in as much as they are not the normal English common law which we are used to dealing with but they certainly are not novel because the European Community has had them on board for the past 30 odd years. It has been before the House for two months. People have had ample opportunity to study it. I do not want a repeat of the situation we had in regard to the Companies (No. 2) Bill which went on for three and a half years before it was finally passed.
There is an urgency about this matter, and I am anxious to have the Bill enacted before the summer recess. The Bill also has to go to the Seanad. I do not agree that there has been any undue haste in putting the Bill through this House. It has taken the normal course so far. We cannot have a repeat of what happened in regard to the Companies Bill which took three and a half years to get through the Oireachtas.
I do not know what happened in the case of the Companies Bill but three and a half years is a long time. I am not familiar with the details of that Bill but this is difficult and complex legislation. The Company and Commercial Law Committee of the Incorporated Law Society of Ireland have had the Bill since it was published and will have devoted far more time to it than this House. That committee comprises lawyers, all of whom are capable of understanding the complexities involved. They took until this morning to make their second submission on the Bill. Yet the Minister expects the Opposition parties, who do not have the expert back-up facilities that are available to him and the Incorporated Law Society, to deal with the Bill in the same manner as that committee. This is totally unreasonable and undemocratic and the Minister is doing himself no good in this respect. The Minister is getting the reputation of being uncaring and intolerant — he is not willing to give interviews, will not allow people to make submissions to him and will not listen. This is not good for his reputation or for the reputation of this House.
I have to say that the method as to how this Bill is to be disposed of has been decided by the House this morning. The final Stages will be disposed of at 10.30 p.m. this evening. That is the decision of the House.
Amendment agreed to.
Amendment No. 16 in the name of Deputy Peter Barry. I observe that amendment No. 17 is cognate and I suggest, therefore, that we discuss amendments Nos. 16 and 17 together.
I move amendment No. 16:
In page 5, subsection (3) (a), line 1, to delete "A licence" and substitute "An exemption".
This is a simple amendment. The Minister has repeatedly said that he wants this Bill to represent as closely as possible what is happening in the European Community. What is happening there is that the word "exemption" is used. Yet apart from one section, and the Minister has put down an amendment to change that, the word "licence" is used throughout the Bill. If it is the Minister's intention to follow as closely as possible what is happening in Europe, why has he not used the word "exemption" which has a different meaning to the word "licence"? A person has to apply for a licence to do something while the word "exemption" means that the Bill does not apply to a person's activities. The Minister has not explained satisfactorily why he uses the word "licence" and not "exemption".
The word "licence" was carefully chosen by the draftsman after considerable consideration. In an ideal world it could be argued that the word "exemption" might be preferable. However, the word "licence" fits, from an administrative and legal perspective, the activities of the Authority. It is used to emphasise that the powers of the Authority are administrative as distinct from judicial. It helps to dispel doubt about any constitutional criticism of the character of the Authority's decisions, and for that reason I would not propose to change it. Licence and exemption do not mean totally different things, as suggested by Deputy Barry. A licence gives a person permission to do something which he would not otherwise be empowered or allowed to do. In administrative and legal terms, it has largely the same meaning as the word "exemption." It emphasises the administrative aspect of the Authority's powers as opposed to judicial powers.
I am trying to see if the Incorporated Law Society have anything to say about this point. I have not had a chance to read their submission but I do not think they make a major issue of this. They refer to both block exemptions and licences. Needless to say, I do not accept what the Minister has said. If people are going to use this Bill to take cases to the High Court and the High Court will look at case law in Europe, which I think is the Minister's intention, then the word "exemption" would be more appropriate than the word "licence".
I want to refer to one of the points raised by Deputy Barry concerning the Incorporated Law Society's submission. I take it that their advertence to the fact that the Fair Trade Commission's report advocated that the block exemptions applicable in Europe would automatically apply to Irish law is not acceptable to the Minister. I should like the Minister to say why he has decided that those block exemptions which are well established under European law ought not to apply automatically in the Irish case but that presumably application will have to be made in each individual case.
That question arises under amendment No. 19 and should be discussed then.
Amendment, by leave, withdrawn.
Amendment No. 17 not moved.
Amendment No. 18 in the name of Deputy Peter Barry. I observe that amendments Nos. 20 and 23 are related and I suggest, therefore, that amendments Nos. 18, 20 and 23 in the name of Deputy Peter Barry should be discussed together. Is that satisfactory?
Amendment No. 23 is in my name.
Sorry, Deputy, it is. Are you satisfied that it should be discussed with amendments Nos. 18 and 20?
Yes.
I move amendment No. 18:
In page 5, subsection (3), between lines 10 and 11, to insert the following paragraph:
"(c) Notice of a decision to grant or refuse an individual exemption under subsection (2) shall be given by the authority within two months of being notified by an undertaking or association of undertakings under section 7. with the consent of the parties concerned this period may be extended by a further month. Failure by the Authority to give a decision within the two month period or within three months with the consent of the parties concerned will automatically result in an exemption being granted.".
This amendment proposes to limit the amount of time the Authority can take to either grant or refuse a licence. It proposes that notice of a decision to grant or refuse an individual exemption under subsection (2) shall be given by the Authority within two months of being notified by an undertaking or association of undertakings under section 7. With the consent of the parties concerned this period may be extended by a further month. The purpose of this amendment is quite clear — it seeks to ensure that the position which obtains in relation to decisions by An Bord Pleanála should not obtain in relation to decisions by the Competition Authority. The delays by An Bord Pleanála in adjudicating on applications for planning permission have caused much frustration to people who want to modify or extend their premises, etc. We should not allow the same situation to arise in regard to decisions by the Competition Authority. When an application is made for a licence, to use the Minister's word, the Authority should be so organised that they can give a response within two months. As I propose in my amendment, in cases where there is an agreement between the applicant and the Authority that period could be extended but in any event they should be under pressure to give a decision within two months from the making of the application.
Do I formally move amendment No. 23 at this point?
You may speak to your amendment but only one amendment can be before the House, at any time.
Do I formally move it at a later stage?
Yes, but it is being discussed now.
Do I formally move it now or when we reach it?
As I have said, only one amendment can be before the House at any given time, that is, Deputy Peter Barry's amendment No. 18. Deputy Mervyn Taylor may speak to his amendment No. 23 but he may not move it now.
The purport of my amendment is similar to the purport of Deputy Barry's amendment. It is important that when these applications are made to the Authority there should be no prolonged delays by the Authority in coming to a decision. If there were such delays it could be damaging to business and employment, it could create uncertainty in the marketplace and could lead to all sorts of business difficulties in the industries concerned. Speed is important in all these issues but that is not to say that the authorities should not be given a reasonable length of time to carry out the necessary investigations on every application for a licence or a certificate. It is unfortunate to have to say this, but it is true nonetheless that many adjudicating bodies that give quasi-judicial decisions such as this would be all too often a delay in giving attention to these matters, thus creating all kinds of problems.
An Bord Pleanála, the planning appeals board, was one such board. Local authorities became notorious for delays in dealing with planning applications. The position became so bad that the Oireachtas found itself compelled to change the law to bring in a maximum adjudication period of two months and to provide that if a planning application was not adjudicated upon within the two month period the application would be deemed to be granted. The reason for that is clear enough. I fear, as quite clearly does Deputy Barry, that this Authority might get into the same bad habit of letting an application which is put before them for a licence sit for month after month, causing havoc in the marketplace. The unfortunate applicants would find there is nothing they could do when no decision is forthcoming on the application.
Deputy Barry suggested a period of two months as being a reasonable period, but I believe he was a little short on that. I appreciate that such an application is important, that proper inquiries must be carried out and thought given to each application. I came to the conclusion that three months would be a reasonable period and that we should provide that the decision must be made within a three month period. Such a provision in the Bill would focus the minds of the Authority. If they knew they were working under a time limit it would ensure that they applied themselves to the task entrusted to them under the Bill and that they produced their decision within the appropriate time.
There is one other important distinction between Deputy Barry's amendment No. 18 and my amendment No. 23. In Deputy Barry's amendment he provides that if the decision is not given within the appropriate period the application, exemption, licence or certificate, would be deemed to be granted. I am providing for the reverse, that if the decision is not given within the time limit the application would be deemed to be refused. As the Minister quite rightly pointed out the last day, what is being sought in an application for a licence or a certificate is a derogation from the law. An undertaking or a company seek permission to do something which otherwise would not be lawful, in other words, to break the law, to derogate from the general law that would apply to everybody else. That being so, I felt it would not be right or proper that in the event of the failure of the Authority to give their decision within a particular time, that right to derogate would be given. The correct procedure to adopt in that case would be to refuse the application.
I support the thrust of both amendments. Which amendment is the more appropriate depends on the content of the Minister's reply. The whole purpose of the Bill is to contribute to economic growth in the economy and to realise the expectations the Minister has for it, but an open-ended permission as provided for in the sections as they stand could operate against business. There would be a reasonable expectation of the matter being cleared over a period of time, whether it be two or three months. As I said, we will await the Minister's reply before deciding which amendment is the more appropriate one.
Time limits for particular actions by the Authority in relation to notifications should not be imposed by the Bill because it would be too inflexible. The system envisaged by the Bill is new to Ireland and needs a chance to operate flexibly. The Authority will be able to make arrangements in relation to time limits and, where necessary, this can be done by the making of a ministerial regulation. It would be best that this be done on the basis of practical experience rather than to do so rigidly in the Bill in advance of any experience under the Bill.
Amendments Nos. 18 and 20 propose a deadline system that would be dangerous. Automatic licences or certificates should not be available just because an artificial deadline has passed. While every effort will be made by the Authority to deal with notifications as speedily as possible it is impossible to guarantee that any particular predetermined deadline will be observed in every case, particularly in a very complicated case. Incidentally, the term "certificate", just like the term "licence", is being used to distinguish the administrative nature of the Authority's decisions. "Negative clearance", although a well-known concept at European Community level, are words not found in the Treaty.
Amendment No. 23 in Deputy Taylor's name is the direct opposite of amendments Nos. 18 and 20 in Deputy Barry's name. It would result in an automatic refusal if a deadline is not observed. The approach of automatic granting of a licence if a deadline is passed is too lenient and correspondingly the suggestion of automatic rejection on the passing of a deadline is too harsh.
I failed in my earlier contribution to refer to the last few lines of my amendment. My proposal to have a licence granted automatically if the deadline is not met is the opposite point of view to Deputy Taylor's proposal. I do not agree with Deputy Taylor's suggestion that there be automatic refusal if the deadline is passed. That would be most unfair because it could be used by the Authority as a means of not explaining their decision and by doing nothing the licence would be refused automatically.
I would come back to the point I made a number of times on this Bill. This Bill is causing concern not just among small businesses but to all sections of industry, and the Minister knows this from the number of submissions he has received from the Confederation of Irish Industry, the Small Business Association, RGDATA, trade associations and the Incorporated Law Society. I do not recall in my time as Minister receiving so many submissions on any legislation I had to deal with. An extraordinary number of submissions of a very detailed, complex and comprehensive nature are being made in this case. The purpose of my amendment, and the Minister should adopt it for this reason alone, is to reassure people who are concerned about the costs that will be imposed upon them through the legislation.
I did not hear the Minister's broadcast on Sunday, but he suggested that the Bill would aid job creation. That is engaging in flights of fancy. The Bill will do nothing to create jobs, and unless the Minister agrees to a minimus regulation it might have quite the reverse effect.
Small firms cannot avail of the range of barristers and accountants that big multinational firms use to help them sort out and fill in the paperwork necessary to apply for an exemption under the Bill. Small firms are extremely concerned about the effects of the Bill. My amendment tells them they need not be worried about long delays or about bureaucracy taking control of their business. Many small firms, and big firms as well, are worred about the level of bureaucracy in Ireland. Already we are at a considerable disadvantage in Europe because of our location and now the Minister intends to add more layers of paper filling to businesses which are already at a disadvantage because of their size and their small home market. The Bill is trying to add more costs and I am trying to tell businesses that the Authority will work efficiently and make decisions promptly.
To ensure prompt decisions the amendment requires the Authority to give a decision within two months. The Minister said my amendment is inflexible. It is not. The amendment states that with the consent of the parties concerned the period may be extended for a further month. That is room for flexibility there — I am not hung up about whether the time limit would be two months or three months or whether and extension would be granted for one month or two months. The amendment is designed to give firms confidence that they will not find themselves caught in a bureaucratic jungle for a year or 18 months while waiting on a decision whether an exemption will be granted.
I listened to the Minister's response to both amendments and found him to be unconvincing in the extreme. Surely the Minister must recognise that in the realm of business certainty and knowledge of the work arrangements for an industry must be of the utmost importance. The worst enemy of business and industry is uncertainty, and that is just what the Minister leaves open in the section as it stands.
The issue is not one of the Authority being too lenient or two harsh. The worst possible position that firm making an application could find itself in would be to have to wait for months after submitting an application without knowing when a decision could be expected. A firm making application and experiencing delays could ring the authority to make inquiries about the position but might well be told that the Authority do not know, that it is working on a decision. The firm would be hamstrung. It is all very well for the Minister to tell the House that the Authority will do its best. I do not know whether they will, but one has to consider the experience of comparable authorities that have the job of making decisions on important matters. That experience is not a happy one. Indeed, even in the courts — never mind quasi-judicial authorities, even judicial authorities — cases are heard and long delays occur in giving decisions. There are examples even in the Supreme Court, regrettably, of the courts hearing cases and then inexplicably holding up the giving of a decision for long periods. I know of some cases in which the giving of a decision was delayed by more than two years.
Quasi-judicial authorities, such as this Authority are open to such abuse. If there is no constraint put on them to get on with the job and to apply themselves, they will be under no pressure and if it is not convenient for them to sit one day then an application could easily to put off until another time. In the meantime, businesses, companies and employees would be sweating; waiting daily for a decision. Without a limit on time the Authority would not be pushed and the people could just sit in their offices, bring up a file and have a cup of tea and there would be no great pressure or urgency. That is not good enough and it is not acceptable.
If the Minister were to say that the period of two months was too short but three months was too long and suggested a different time limit we could consider that, but it is not good enough to leave the measure at the discretion of an appointed authority in the sure and certain knowledge that they will be under no pressure to give a decision. I am sure that many applicants would rather have an application refused than be left dangling and not knowing one way or the other. It is possible that even a refusal would be better than the uncertainty involved in waiting indefinitely for a decision to be made.
As the Bill is structured an undertaking makes application to the Authority. It is a kind ofex parte arrangement, a one-sided application. At that stage nobody is making objections to it. My amendment tries to remedy that position, but that is a separate matter. How could the Minister justify an unnecessarily extended period for the Authority to give its decision? All that the Authority have before them is an application. They read it, discuss it and give their decision. For the life of me I do not understand how that could possibly take longer than three months. If the Minister were to say that a maximum of four months were necessary, so be it; I should be prepared to listen to that. Why give the Authority the luxury that most of us do not have of a completely unspecified period of time within which to apply themselves to the documentation and make a decision on an application?
I shall not say any more on the other point of difference, be it the granting of or the refusal of an application; I think that either would be preferable to doing nothing. I still consider my own preference to be better, having regard to the fact that it is a derogation from the law that is at issue and that a derogation from the law, possibly of major benefit, should not be granted by default, as it were. For that reason a refusal would be safer. In my view, however, Deputy Barry's amendment would still be better than nothing.
The Minister asks us to be flexible at the beginning and to allow the legislation a period of time to work. I should have thought that it was at the beginning that we would need to enshrine certainty because it is at the beginning of the operation of the legislation that the questions posed by the amendments will focus most sharply. After that small businesses will have an opportunity to consider the record and the past pattern and they will be able to make a reasonable guess at the likely outcome of an application.
Many of the representations that have been made to us relate to the questions of certainty and clarity. People are not quite sure whether they should make an application or keep their heads down. That is the kind of query the Minister may consider to be very uninformed, but that is what I have been hearing for some representations made to me. If people are to get expert advice that they must make application — as it seems to me in the cases envisaged here — it is imperative at the beginning that they be able to know that a decision will be made in two months, three months, four months, or whatever the reasonable cut-off time is to be. They need to be able to plan their businesses with certainty in the expectation of receiving the presumed derogation.
I am certain that businesses would prefer Deputy Barry's amendment which requires that if they do not hear within a specified period that the licence is granted that would be the end of waiting. That is not to comment on perhaps more important questions raised by Deputy Taylor's approach, which is to say that a derogation is not forthcoming. Businesses would certainly prefer that. Quite clearly they cannot function in an environment where they do not know what the outcome will be. The planning area, for example, is remarkable in the operation of the local authorities, where we are all accustomed to how local authorities can let important decisions drag on seemingly for ever, but because the planning laws are framed in the way they are, they simply must deal with planning applications within a specified period, or if they do not they know the alternative. Similarly, rather than helping business, the absence of any deadline will impede business. I would ask the Minister to reconsider. Simply appealing to the House to allow the Act a period of time to operate, will be cold comfort to the many small businesses who have no experience in this situation and who will be concerned to know that at least if they seek advise from business organisations, they can advise them with certainty.
A lot of points of a general nature were made. They are really a re-hash of what was said the last day and already this morning. I will deal briefly with them as a matter of courtesy.
So far as these time limits are concerned, if necessary, they can be made by ministerial order under section 7 (6). The imposition of time limits in an Act would be far too inflexible because if they proved inappropriate or unsuitable they could only be changed by legislation. We all know that time elapses between a decision to produce legislation and its ultimate drafting and enactment. It could be a number of years. That would be unreasonable. The fact that time limits can be prescribed by the Authority or the Minister is perfectly adequate. It is unfair of Deputy Taylor to imply that the Authority and their staff will neglect their duties in the way he has suggested. That is not so. The body concerned have always been assiduous in trying to do things quickly and I see no reason why they will not continue to do so particularly now that they have this additional duty and additional staff and powers.
Deputy Taylor makes the point that there should not be prolonged delays. It must be remembered that in an application of this kind the parties involved can contribute to delays by failing to respond in a reasonable time to requests for clarification or supplementary information. If there was an automatic granting of a licence or an exemption after a particular period, if the parties who applied contributed to the inability of the Authority to make a decision in the time limit by virtue of their refusal to co-operate, it would be crazy to grant a licence or an exemption in circumstances where people might possibly not be entitled to one at all. On reflection Deputies will agree that that would be entirely unsatisfactory.
In a very edited version of an interview which I gave last Sunday and which was broadcast I referred to the effect that this Bill will have on the economy generally. That includes employment, but not specifically employment. Since this point was raised by everyone who spoke it is worth repeating what I said on Second Stage, that the stimulus provided by competition has been shown to have a very beneficial effect on the economy of countries who have strong competition laws. It is no coincidence that it is countries like Germany and the US who go to some lengths in their laws, and have for a long time, to encourage competition and to discourage restrictive practices and other concerted practices of that kind, that are endemic to certain aspects of the Irish economy, who are amongst the most successful economies in the world and have been for a long time, and have been for so long as they encouraged competition in this way. Therefore, it is quite justifiable to say that the provisions of this Bill will have an effect on the economy.
Deputy Barry referred at length to small businesses being very worried and concerned and implied that very small business would be affected in some way by this Bill. This Bill can affect businesses only if they come within either of two categories or within both categories. If they are involved in anti-competition agreement or concerted practices they will be affected. The vast majority of businesses both small and big in this country are not involved and therefore they cannot be affected. If they have a dominant position in a market sector and they abuse it, they can also be affected by this Bill. The vast majority of businesses here, at least 99 per cent of them, do not have a dominant position in any market. Therefore they cannot abuse it and the Bill cannot apply to them. It is an exaggeration to say that every proprietor of every corner shop in the country is trembling in his shoes at what might happen on the passage of this Bill.
Deputy Barry makes great play of the fact that the Incorporated Law Society made two submissions in regard to this Bill. Deputy Barry may not know that the Incorporated Law Society comment on every Bill that is of any legal interest to or that impinges in any way on solicitors. They do so in the kind of technical detail that is in this submission. In their supplementary submission they said they were pleased to note that the Minister had accepted a number of their recommendations and they went on to deal for a second time with a number of other recommendations they made in early May which already had been discussed in detail with them by officials of my Department. There is nothing unusual about that. They were met in the same way as they are met on every Bill. It is always their practice to make these kinds of technical submissions from the point of view of solicitors. It is useful that they do. It is of benefit to my Department to meet them and to exchange views. We agree with them on certain matters and point out where we believe they are wrong in other matters.
The Minister said that I am exaggerating when I say that small businesses are concerned about the effects of this legislation. I am not. They are concerned. The Minister says the vast majority of small business will not be affected. I know that and the Minister knows that but they do not, because the Minister said that this is very important legislation which will change the face of Irish industry. They are concerned. They feel they will always have to consult this legislation and that they will have to consult accountants to know whether they are affected by the Bill.
That is why they are afraid. He said it will not apply to the vast majority, which is true. He also said that 99 per cent of the balance will not be affected because they will not be in a dominant position in abusing it. That is also true but, if that is the case, this very important legislation will not have the wide-ranging effect on the economy which he claims at the same time.
I cannot imagine that what the Minister said about the Incorporated Law Society is correct, that they make submissions to all Departments on the technical aspects of every Bill introduced. However, those of us who are not lawyers need time to understand whether they are making valid points and we cannot do that if the Minister insists on rushing this difficult — as far as I am concerned — legislation through the House. I am expected to absorb, understand and make a judgment on the submission of the Incorporated Law Society within two hours of getting it. It arrived this morning in the post and the resumed Committee Stage of this Bill commenced at 12 o'clock today.
The amendments we are discussing are fairly clear. Members have been making Second Stage contributions and I should like them to home in on the requirements of Committee Stage.
The Minister said that time constraints are not desirable. On reflection, perhaps he will agree that they are desirable because people affected by this legislation do not want to wait. He said they could use this waiting period to make sure they get the exemption licence because they would refuse to respond to queries from the Authorities. That implies the same kind of criticism of business communities which he has already accused Deputy Taylor of applying to the Authority. That is unfair because business people are not engaged in a kind of one-up-manship against the Department of Industry and Commerce, the Competition Authority or any other authority. They are there to invest their shareholders' funds, to achieve targets in relation to growth and to give employment — in that order — because you cannot have the third without the first two. To suggest that they will deliberately try to use the law to evade their responsibilities is not true; they would not waste their time in that kind of playacting.
I said that some people could do that.
Amendment put and declared lost.
I move amendment No. 19:
In page 5, between lines 10 and 11, to insert the following subsection.
"(4) (a) Any agreement between undertakings, decision by association of undertakings or concerted practice that is within an EC block exemption will be exempt from the provisions in section 4 (1).
(b) Any agreement between undertakings, decision by an association of undertakings or concerted practice that would benefit from the provision of an EC block exemption but which does not do simply because it does not affect trade between member states of the EC will also be exempt from the provisions in section 4 (1).
(c) Any agreement or concerted practice between undertakings in the same group of companies is exempt from the prohibition of section 4 (1) in so far as the undertakings within the group do not enjoy real freedom to determine their individual course of action in the market.".
This is an important and substantive amendment which I hope the Minister will accept. I gather from what the Minister said that subparagraph (a) was one of the points made by the Incorporated Law Society. It makes eminent sense to put it from a legal or business point of view and page 3 of the Incorporated Law Society's second submission 3.3 states:
Apart from the fact that agreements which conform with EEC block exemption regulations are unlikely to have an appreciable adverse effect on competition in the State, the inclusion of such automatic licensing provisions in the Bill would eliminate any uncertainty as to the legal status of such agreements. At present, the position under EEC competition law appears to be that an agreement which has been exempted by the EEC Commission, either individually or by means of block exemption regulation, can be prohibited under national competition law only to the extent that such prohibition does not interfere with the uniform application of EEC competition law throughout the Community.See: Case 14/68: Walt Wilhelm v Bundeskartellamt (1969)... The EEC Commission's interpretation of this case law is that it means in effect, that such agreements may not be prohibited under national competition law... The Committee believes that the Commission's interpretation may well be correct and that any doubts in this regard should be eliminated by including a specific provision to this effect in the Bill. Otherwise, parties to agreements which have been exempted by the EEC Commission will also have to seek licences from the Competition Authority, with all the additional time and expense which that will involve. If the Competition Authority were to refuse to licence such an agreement and the parties appealed to the High Court, it is very likely that the matter would have to be referred to the European Court of Justice for a ruling under Article 177 of the EEC Treaty, with all the further expense and delay which that would involve. Quite apart from the point of principle involved, the Committee believes that for these administrative reasons, it is desirable that this question be clearly resolved in the Bill.
That makes the point much better than I could. It is quite clear that it would save companies having to jump two hurdles, with all the expense involved. If the Competition Authority refused such an exemption then the people who were refused would have to go to the High Court which would probably refer it to the European Court, involving enormous expense. It would be a legal obstacle race to get a result, which is almost inevitable at this stage, and should be put beyond doubt by incorporating it in the Bill.
Paragraph (b) refers to EC block exemption and paragraph (c) takes account of the fact that there may be a parent company. A big conglomerate may well have two or three companies in this jurisdiction and the Authority might decide that they were abusing their dominant position in this market. However, the companies concerned might not agree to stop abusing their dominant position because they may be under the control of a board or company in London, Paris or Brussels. Therefore, they may not be free to stop abusing their dominant position.
This amendment is extremely important and I hope the Minister will take it on board. Companies who already have exemptions in Europe should not be forced to apply again here; companies which fulfil all the requirements for an exemption in Europe but who are not engaged in trade with inter-member states should not be required to apply for an exemption here as well. Companies who are trading here, who may have a dominant position and who may, in the opinion of the Authority, abuse the dominant position, may not be doing so because the parent company are imposing the conditions of trade on them. In that case, the parent company should be taken before the European Community if it is outside the country. Of course if they are in this country the same problem will not arise.
I support the amendment put down by Deputy Barry. These amendments take account of the fact that businesses will be subject to more red tape and bureaucracy following the enactment of this legislation and in an effort to cut through some of this we suggest that those companies who have already received an exemption from the European Community should not have to seek an exemption under this legislation. I am disappointed with the Minister's statement that many businesses will not be affected by this legislation. However he has contributed to the uncertainty in regard to agreements, decisions on concerted practices, by failing to define in section 4 what practices will be outlawed. He has even failed to define "distorted competition". As a result the section will be open to interpretation in the courts and many cases will find their way to the European Court of Justice who will bring our legislation into line by way of guidelines imposed on us.
Given that there are sufficient examples of anti-competitive practices and abuse of dominant position, the Minister should let the House know what guidelines he will give to the courts who will interpret this section. This amendment provides for the exemption from the provisions of this section of any agreement, decision or concerted practice that is already exempted by the EC.
Paragraphs (a) and (b) of amendment No. 19 would have the effect of exempting, without any examination, potentially anti-competitive practices and agreements within the State. This Bill will not change the effect of European Community exemptions whether acquired as a result of individual applications or benefiting from a block exemption. While the benefit of an exemption at Community level could be justified, that might not be the case within this State. That must be obvious. The Authority will have to decide in the context of market conditions in Ireland and not elsewhere what exemptions should be granted.
There is a perceived difficulty in relation to agreements between companies in the same group which paragraph (c) of the amendment seeks to address. Subsidiaries are subject to the control of parents but are considered to be separate undertakings by virtue of the definition in section 3. At European Community level a group as a whole is generally considered to be an undertaking. However it is not proposed to make such a change in the definition. First, section 4 (1) prohibits all agreements and concerted practices between undertakings "which have as their object or effect the prevention, restriction or distortion of competition." I wish to repeat that it does not prohibit all agreements. Second, where a parent instructs a subsidiary to act in a particular fashion that does not constitute an agreement but rather a decision. Section 4 applies to decisions of associations of undertakings and not to decisions of individual undertakings. If there is any difficulty the Authority will have the possibility of making decisions in particular cases or in categories of cases. It is proper that this be left to the Authority to decide, in the words of subsection (2), "having regard to all relevant market conditions".
Deputy Barry made the point that we should have a block exemption system but I would suggest to him that under section 4 (2) we have one. The Competition Authority may grant a licence for the purposes of that section in the case of any agreement or category of agreements — that is a block exemption as there could be thousands of agreements in a category of agreements — or any decision or category of decisions or any category of concerted practices. Therefore, the point made is fully covered.
Deputy Hogan complained that we failed to define terms like "distorted competition" and as a result it may be necessary to refer cases to the European Court of Justice. The courts here must take judicial notice of the Treaty and of the decisions of the European Court of Justice. These matters have been thrashed out in European Community jurisprudence and they apply here by virtue of Statutory Instrument No. 341 of 1972, which, I was surprised to discover, I myself made on 29 December 1972, a few days prior to our entry to the European Community, to come into effect on 1 January 1973.
I take the Minister's point regarding the position that would pertain in Ireland so far as competition is concerned and that which might pertain in the European Community at large. I sympathise with that up to a point but the law society pointed out that there was a need for certainty in this regard and to make clear what effect EC block exemptions will have in the Irish legal scene. If the Minister takes the view it is inappropriate for them to have effect here and that they do not have effect here, we should consider including in the Bill a clear statement that notwithstanding the fact that EC block exemptions exist, they shall not be deemed to have force here and it shall be necessary to make an application to the Authority to obtain the same cover. As I said earlier, there is a need for certainty. The law society in their submission suggested that if the Bill is left as it is there will be uncertainty with the result that there could be litigation yet again being initiated in the High Court and possibly going to the European Court with all the rigmarole, waste of time and expense that would involve.
I do not accept the Minister's statement that it is not desirable to allow those companies who have received block exemptions from the European Community the same facility here. The commercial committee of the Incorporated Law Society made a good point. It is quite clear that those companies who are refused an exemption under this legislation will not be allowed to appeal to the High Court. The Minister is making a false argument. They cannot appeal to the High Court.
I never said they could.
No. Deputy Taylor did. A third party can only appeal to the High Court if a licence is granted but if somebody applies and is refused a licence that is the end of it. We would now have a ludicrous position where a company granted a block exemption in the European Community would have no recourse if their application for a licence was refused here.
They could apply to the High Court for a declaration that they would be covered by the European block exemption and if that became a European issue, the High Court would have to refer it on to the European Court for a determination.
One can imagine the joy in the boardrooms as they contemplate that course of action while at the same time trying to keep the bank manager off their backs and the workforce happy. They are trying to produce goods and create markets for them and it would be ridiculous if the time of board members was tied up in this kind of legal squabbling.
We tried to introduce an amendment which would allow them to appeal to the High Court but the Minister turned it down. However, it will come up later. They would have to take the more tortuous route outlined by Deputy Taylor. The submission from the Incorporated Law Society covers this point. Indeed my amendment, which was tabled before I saw the submission, makes this point also and I suggest the Minister should accept my amendment for the reasons set out in the submission of the Incorporated Law Society and the arguments made here.
The Minister referred to inter-company agreements and from his tone I understand he is sympathetic to the view that the parent company and not their subsidiary should be held responsible for an abuse of the dominant position because the subsidiary company have to accept instructions from their owners. I do not think the Minister referred to another point I am concerned about — but I may be wrong — and that is the question of exemptions for companies engaged in interstate trading. I think they should be exempt. I do not think the point made by both Deputy Taylor and the Minister that the law has to be applied differently in this country is correct because, as I understand it, the EC Directive says that the law applies in the Community or in any section of the Community. In fact, before granting an exemption the EC would have taken account of what is happening in Ireland because we are part of the Community, even though you wonder whether people realise it. The EC would take account of our position because the exemptions apply to the Community or any part of it. It would save a great deal of headache, boardroom wrangles and lawyers' and accountants' fees if the Minister would accept my amendment at this stage.
Amendment put.
The Committee divided: Tá, 60; Níl, 71.
Tá
- Allen, Bernard.
- Barrett, Seán.
- Barry, Peter.
- Browne, John (Carlow-Kilkenny).
- Bruton, John.
- Bruton, Richard.
- Connaughton, Paul.
- Cosgrave, Michael Joe.
- Cotter, Bill.
- Creed, Michael.
- Crowley, Frank.
- Currie, Austin.
- D'Arcy, Michael.
- Deenihan, Jimmy.
- Doyle, Joe.
- Durkan, Bernard.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- Ferris, Michael.
- Finucane, Michael.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Charles.
- Gilmore, Eamon.
- Gregory, Tony.
- Harte, Paddy.
- Higgins, Jim.
- Higgins, Michael D.
- Hogan, Philip.
- Belton, Louis J.
- Boylan, Andrew.
- Bradford, Paul.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- Lowry, Michael.
- McCartan, Pat.
- McCormack, Pádraic.
- McGahon, Brendan.
- McGinley, Dinny.
- Mac Giolla, Tomás.
- McGrath, Paul.
- Mitchell, Gay.
- Moynihan, Michael.
- Noonan, Michael.
- (Limerick East).
- O'Brien, Fergus.
- O'Keeffe, Jim.
- O'Sullivan, Gerry.
- O'Sullivan, Toddy.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Reynolds, Gerry.
- Sherlock, Joe.
- Spring, Dick.
- Stagg, Emmet.
- Taylor, Mervyn.
- Taylor-Quinn, Madeleine.
- Timmins, Godfrey.
- Yates, Ivan.
Níl
- Ahern, Dermot.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Gerard.
- Brennan, Mattie.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John (Wexford).
- Calleary, Seán.
- Calley, 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, Maáire.
- Harney, Mary.
- Hillery, Brian.
- Hyland, Liam.
- Jacob, Joe.
- Kelly, Laurence.
- Kenneally, Brendan.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Lenihan, Brian.
- Leonard, Jimmy.
- Lyons, Denis.
- Martin, Micheál.
- McCreevy, Charlie.
- McDaid, Jim.
- McEllistrim, Tom.
- 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 J.
- O'Rourke, Mary.
- O'Toole, Martin Joe.
- Power, Seán.
- Quill, Máirín.
- Roche, Dick.
- Smith, Michael.
- Stafford, John.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Joe.
- Wilson, John P.
- Woods, Michael.
- Wyse, Pearse.
Tellers: Tá, Deputies Flanagan and Boylan; Níl, Deputies Gallagher and Clohessy.
Amendment declared lost.
Progress reported, Committee to sit again.
Sitting suspended at 1.40 p.m. and resumed at 2.30 p.m.