We will now deal with the Competition Act 2002, Order 2002, S.I. No. 622 of 2002.
Competition Act 2002: Motion.
May I make a point? The Order of Business for the Dáil is in 45 minutes. The second item on the Order of Business today is the rubber stamping of this matter which we have not even considered yet. It is on the Order of Business today on the basis of the committee having reported back to the House.
This is an important issue. The order proposes that mergers or take-overs of media interests, regardless of their value, would be automatically notified to the Competition Authority which would examine them in terms of the impact they would have. Those of us in the south east are aware of the take-over of Kilkenny local radio which caused huge interest in Kilkenny. This committee has a role to engage with media groups such as Kilkenny Radio and to bring its views here. That is how we make ourselves relevant. There is a similar issue in Kerry with the take-over of a publication there.
The matter of local publications, either print or local radio stations, increasingly falling into the hands of a smaller group of people is a big issue. For example, in the area where Deputy Dempsey and I live, Independent Newspapers is the most dominant national media. It also owns the most dominant local paper and now it has an input into a regional radio station. Few matters would be more significant than this, yet we are going to deal with it now and it will be rubber stamped by the Dáil, without debate, shortly.
This issue has huge relevance and resonance across the country. If we are to make ourselves relevant as a committee we should have had prior notice of it. I would have liked to invite representatives of Kilkenny local radio here to make their views known and to show that we are responding to issues of local concern across the country.
That is a valid point. We will review progress in regard to this. The committee must report to both Houses of the Oireachtas prior to this item being considered by the Dáil or Seanad this morning. I have been advised that it is non-controversial and updates the provisions of the Newspaper Order Act 1979 to include the broadcasting services. I am in the hands of members in regard to this matter and will bear in mind the views expressed here.
I welcome Kevin Byrne and Eamon Carey from the Department of Enterprise, Trade and Employment to speak to the committee on this matter. I draw their attention to the fact that members of this committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. While it is generally accepted that witnesses would have qualified privilege, the committee cannot guarantee any level of privilege to witnesses appearing before it. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name in such a way as to make him or her identifiable.
This order is about media mergers and notification and the circumstances in which such mergers should be notified to the Competition Authority.
On a point of order, how are we going to deal with this? I would prefer if we did not deal with it today. I have no difficulty having a discussion on it in the half hour we have before the Order of Business. However, it is important to involve those who are relevant if the committee is to be relevant. With all due respect, it is also a shot across the bows of Departments which believe that, if there is a deadline for passing a Bill, they can lob it to a committee and presume to have it presented before either House on the same day. That makes our scrutiny a matter of irrelevance. My preference is that we consider the matter today but also look at the issues with regard to Kilkenny Radio and the situation in County Kerry, of which the Department officials will be aware of the details. People will be anxious to know that we are responding to their concerns.
I support Deputy Howlin's comments. To what shortcomings is the short notice of this matter attributable? It is my understanding the Whips would have agreed the schedule of business last Thursday. I have the impression that we are being railroaded. Representatives from Kilkenny Radio and CKR, whose licence is also being changed, should be afforded an opportunity of making a presentation to the committee. I am unclear as to what we can do at this stage. Can the Whips be contacted to ensure this matter is not taken this morning on the Order of Business? If we are to act on this, it is essential to do so before the House convenes this morning.
In relation to Deputy Nolan's point with regard to timing, we agreed last week to take this matter today. Perhaps the clerk to the committee can clarify the situation with regard to the timeframe?
May I point out that the order does not preclude us from returning to the issue in more detail at a future date? It actually allows us to return to it by enabling the Department and the local radio and media——
Yes, I agree.
The order is of benefit to the committee, although I agree with the comments of my colleagues. After the proceedings have been completed in the Dáil and Seanad, we will have an opportunity to invite the organisations concerned to discuss developments with regard to mergers and take-overs in local broadcasting.
Is that agreed? Agreed.
In terms of the Order of Business today, we should notify the Department that the committee should not be presented with situations like this, where there is a presumption that a matter can be taken in the House within an hour of our deliberation. That is simply not satisfactory.
It flies in the face of the co-operation the committee has received from all parties. We should sound a note of warning to all Departments that the committee cannot be expected to conclude the business before us one hour before it goes to one of the Houses. Mr. Carey, please continue.
The order involves two matters: media mergers and the circumstances in which such mergers should be notified to the Competition Authority under the Competition Act 2002. Most of the Act came into operation in July last year; the part referring to mergers and acquisitions came into operation on I January 2003. The Act made substantial changes in relation to mergers generally. In particular, it transferred responsibility from the Minister, with whom it formerly rested, to the Competition Authority which is an independent statutory agency. The only real exception is in relation to media mergers, in regard to which the Act has introduced additional requirements, in particular by providing a power for the Minister to overrule or vary certain decisions of the Competition Authority on public policy grounds. Under the Act, the authority operates on competition issues and related economic considerations.
In view of the special position of media mergers, including newspapers, radio and television, the Legislature, however, clearly considered that additional safeguards and procedures were required. The order fills in some of the detail. Essentially, the situation is unlike that of ordinary mergers which have to be notified only if they exceed quite a high financial threshold - a turnover of €40 million. If that was applied to media, many provincial newspapers and local radio stations would be outside the scope of merger control. The order provides that every media merger, irrespective of size, will have to be notified to the Competition Authority. That is the essential point of the order. The other provisions of the Act will then kick in, particularly section 23 which provides for the public interest check on the authority to be operated by the Minister in co-operation with the Legislature. Any order the Minister might make to restrict a media merger would have to be laid before the Houses of the Oireachtas. The order simply fills in a little of the detail of the Competition Act 2002. To date, no media mergers have been referred since the new regime came into effect on 1 January, but it is early days yet.
In a situation where UTV is buying Kilkenny Radio, does this require notification and consideration within the Oireachtas?
As a media merger, irrespective of the financial numbers involved, it has to be notified to the Competition Authority. There is an elaborate process set out in Part 3 but, essentially, the authority has to examine it on competition grounds, involving the economics of the situation. It has power to block the merger if it is not happy with it on competition grounds and that is the end of it. However, if it gives its approval, there is an opportunity for the Minister of the day to vet it also and either ban or allow it through on conditions. That would be done by way of an order which would have to be laid before the Houses of the Oireachtas and, in the normal way, liable to be annulled under section 25(1) of the Competition Act.
I understood the Chairman's question to relate to whether the committee would have an input with regard to a proposed merger.
That was my question.
Sorry, Chairman. The parliamentary role is set out in section 25(1) of the Competition Act. Essentially, what happens is that an order is made by the Minister and laid before each House of the Oireachtas as soon as may be. If a resolution annulling the order is passed by either House within 21 days, the order is annulled. As I understand it, it is a matter of procedure for the Houses as to how it will be done.
Is the order laid before the Houses after the Minister has made it?
Yes.
It is not laid in draft format for approval before it is made. That is the weakness from our point of view.
It is not prior approval. Nevertheless, it is still a form of parliamentary scrutiny. If the order is not liked, something can be done about it.
We still have power to take it to the floor and discuss it in committee after the merger.
I assume this would be the relevant committee, as on the present occasion where this order is being considered.
Is Mr. Carey satisfied that this order is adequate? Does he consider that it might require new legislation to update the Acts to bring them into line with the proposal? An order is in keeping with the Act but would a new Act not be appropriate, in the context of current developments in broadcasting, to encompass those developments?
I am anxious that the committee would have a more pro-active role than is laid down, and I believe we can claim that. In regard to this legislation, if the Minister decided that no order would emanate from the Department of Enterprise, Trade and Employment, there would be no order for the committee to consider and we would not have a role. For example, if there was a merger about which the committee had something to say while the Minister did not, there would be no order to consider.
This area is one of extreme importance, particularly to local representatives because the local media is so important. There is a genuine fear that ownership of the variety of media - national, local print and local radio - is being concentrated in fewer hands. The motivation behind this order is that all future mergers would be examined. Is it envisaged that the Competition Authority would analyse the current position in advance of having to consider any future application for merger acquisition - in other words, to deal, as section 23 of the Act states, with the extent to which ownership and control of particular types of media is spread among individuals and other undertakings? Can the Competition Authority be requested to embark on that study and then present its data to the committee? That would allow the committee to see the extent of concentration of, as the Act states, ownership and control of particular types of media businesses in the hands of individuals and other undertakings.
It is a very good point.
Senator Leyden asked whether a new Act is needed. I imagine the Minister, having done a lot of work to bring forward the Competition Act 2002, is not keen to put this on her legislative programme for the moment. Much work went into that Act over four or five years. There was a major review by the CMRG, and a commission chaired by the former Chief Justice, Mr. Finlay, sat in regard to newspapers. The Department considers it a good and comprehensive Act. It is the first time all of our competition legislation on mergers and competition is in one place.
The media area was investigated in great detail by the newspaper commission and the CMRG. It is quite up to date and the Department would not see any need for legislative change at this point. We will monitor progress. A great deal of the Act came from amendments in the Houses. Like all legislation, it will be kept under review. In a few years time, particularly when the results of individual mergers and merger decisions are known, if weaknesses or defects are found, there will be an opportunity to look at it.
On Deputy Howlin's question regarding studies by the authority, Part IV of the Act deals with the Competition Authority and there is a combination of new and old in that regard. However, the authority is fully empowered to carry out any study it likes on any matter. It is an independent body and is empowered under section 30 regarding studies. Apart from its enforcement work investigating misconduct and so forth, it is empowered to carry out general and broad studies. If this committee wants the authority to carry out a study into media, there is no reason it cannot be asked to do so. However, it is an independent body and it will be a matter for it.
With regard to the parliamentary role, there are a number of provisions in Part IV under which the authority has a relationship of accountability to the Legislature. In particular, there is provision in section 38 which states the chairperson of the authority "shall whenever required to do so by a committee appointed by either House, the business of which committee includes the examination of policy in relation to competition" attend to discuss the general activities of the authority. The committee obviously would be this one. This provision is the result of an amendment made by the Oireachtas. There is also a financial relationship because the chairperson of the new authority - this is one of the new features - is accountable to the Committee of Public Accounts.
There are many provisions under which a degree of accountability is provided for and there are many opportunities for the committee to take whatever initiative it wishes.
Much of this relies on the strength and the interest of the Competition Authority with regard to how it monitors and deals with the proposed mergers and acquisitions. As raised by members this morning, it is something we, as politicians and public representatives, need to keep on top of, especially in regard to a combination of television, print and radio media being connected to the same companies. If one listens to radio and television programmes, most journalists are inter-linked and have a major input. If one particular group were to be in possession of all three of the media - print, radio and television - it would be enormously influential. It is the concern of committee members that such a group would not be over-influential.
Are we officially agreeing with Deputy Howlin's request that such an investigation take place?
That can be decided later. This has been law since 1 January. Is that correct?
Yes.
We will closely monitor things in regard to Deputy Howlin's point.
Is that in regard to an analysis of the existing situation?
The committee has considered the order but has also laid down a strong marker that anyone who makes up his or her mind that this committee will consider legislation at 9.30 a.m. before the Dáil or Seanad sits at 10.30 a.m. cannot take the deliberations of the committee for granted in future. It is not the proper way to do business and I will speak with my secretariat immediately after this morning's meeting to ensure this will no longer be the case. Is that agreed? Agreed.
I thank Mr. Carey and Mr. Byrne for attending the committee meeting and updating us on the document before us.
Item No. 4 is the scrutiny of the EU legislative proposals. The committee has agreed to postpone this.
The Chairman will talk to his colleagues in order that we will not be faced at the next meeting with——
I will ask the clerk to the committee to speak to the man who co-ordinates such matters.