I am pleased to have the opportunity to introduce this Bill to Seanad Éireann. It is of vital importance. It strengthens the powers of our competition authorities to effectively enforce competition law, creating a fairer environment for Irish businesses and consumers. The Bill has passed through the Dáil and it was great to witness the cross-party support that exists for its provisions.
I think it is accepted by most Members of this House that the transformation of this country’s economy from an inward-looking and State-dominated economic model to one of export-orientated growth, dynamic competition and increased choice for citizens has resulted in unimaginable societal and economic progress for the State and its people in the past 30 years or so.
Much of this progress arose from policy decisions made and voted on by the Oireachtas driven by the desire of previous Members of this House to end the relentless emigration of our people and to pursue the idea that this nation’s living standards could be as good, if not better, than those of our European neighbours. We have, as a country, surpassed even those goals, not by accident, but by decisive and deliberate efforts of the Government to ensure that Ireland continues to have a competitive economy, not for its own purpose but to fund a fair and inclusive society, with high levels of educational attainment, good quality employment and social supports for our citizens.
The advance of our integration in the EU’s Internal Market has not only created record-level employment, it has also benefited our citizens in the choice of goods and services they can access here for competitive prices. We are all well aware however, that there are sections of our economy that are less competitive than others. Indeed, in some instances, they have conspired to keep it that way. All of us are far too aware of sectors that still have high costs associated with the services they provide, resulting in high profits but underwhelming services. We know practices that drive out competition, that drive up costs for ordinary citizens and that undermine the dynamic nature of our economy. This is why I am particularly determined to introduce this Bill to the House today for Senators’ consideration. I hope this legislation will go a long way in deliberately disrupting firms and companies that do not play fair, that try to drive out competition and that seek to rig the system to increase profits in an unfair way.
The purpose of the Bill before the House today is to introduce measures that will strengthen the powers of our national competition authorities and to give them greater tools to tackle anti-competitive practices. For too long, the State has been seen as soft on rogue businesses and those seeking to game the system. This view, whether justified or not, does significant damage to the credibility of Ireland as a place to do business and it undermines the confidence our people have in Government and Government agencies.
We see continued frustration with the high cost of insurance in this country, which is driving many small enterprises and community groups out of business. The impact on local employment and creativity when this occurs can be profound. I share that deep frustration. Despite some of the most significant reforms made in the law pertaining to competition, consumer rights and personal injuries in recent years, premiums have not dropped sufficiently and uniformly despite assurances made by the insurance sector. I think it is fair to say that the outcome of the recent investigation by the Competition and Consumer Protection Commission, CCPC, into the motor insurance market leaves questions unanswered. It also shows the need for legislation, which I am introducing today.
Let me be clear: this Government wants to see severe consequences for companies that engage in price-fixing, bid rigging or any other forms of anti-competitive practices which do damage to our economy and our people. We believe that unlawful actions by companies should have strict and severe consequences. There needs to be proper penalties for unlawful actions. That is the reason and purpose of the introduction of this Bill today. We are seeking to give teeth to our agencies that are charged with protecting consumers and our economy. We need to properly resource those agencies and give them the powers required through legislation to carry out their tasks both efficiently and effectively.
As Members of this House will know, Ireland has two national administrative competition authorities, namely, the Competition and Consumer Protection Commission and the Commission for Communications Regulation, ComReg. This Bill will transpose the ECN+ directive. This will mean that for the first time in Ireland, competition law can be enforced through administrative actions taken by competition authorities. The European Competition Network, ECN, is composed of the Commission along with national competition authorities from each member state.
It became apparent to the network that there are a number of areas in which existing EU law is insufficient to meet the objective of a fair Internal Market for everyone. These include, but are not limited to, giving national competition authorities the means to impose effective fines and implement leniency programmes. The ECN+ directive intends to fill some of the gaps that exist in the current system. The new powers given by the ECN+ directive will apply only where there is an interstate trade element.
In deciding to implement this directive through primary legislation, the Government felt that it was important that the same sanctions should also apply to breaches of national competition law. This will avoid having two parallel systems with differing sanctions. The stated aims of the ECN+ directive are as follows: to ensure that all national competition authorities have effective investigation and decision-making tools; to ensure that all national competition authorities have the ability to impose effective deterrent fines; to ensure that all national competition authorities have a well-designed leniency programme in place which facilitates applying for leniency in multiple jurisdictions; and to ensure that the national competition authorities have sufficient resources and can enforce EU competition rules independently.
The date given by the Commission for transposition of this directive was 4 February 2021. Unfortunately, we, along with several other member states, did not manage to transpose this directive by this deadline. I do not need to tell the Senators how incredibly difficult the last two years have been, or about the significant legislative burden that the pandemic has placed on both Houses of the Oireachtas. This is a difficulty we share with our European counterparts.
Particular to the Irish context, however, was our unique constitutional position. Transposing the ECN+ directive raised significant constitutional considerations, given the particular role of the courts in the Irish Constitution. The constitutional concerns included the introduction of the concept of administrative sanctions, periodic penalty payments, interim measures and leniency provisions. Ireland has robust defences against the administration of justice by any body, save for the Judiciary. In order to transpose this directive in a way that is compatible with Irish law, it was necessary to consult with a number of legal experts to ensure that the legislation would be workable.
Additionally, in April 2021, the Supreme Court issued a majority judgment in the case of Zalewski v. the Workplace Relations Commission and others, which had a significant impact on the drafting of the Bill, which was quite advanced at that stage. A previous decision of the High Court had concluded that the Workplace Relations Commission, WRC, was not administering justice within the meaning of Article 34 of the Constitution. The judgment in this case overturned this decision. The Supreme Court agreed that the adjudication service of the Workplace Relations Commission does constitute the administration of justice, which has been traditionally regarded as the exclusive preserve of the courts. However, the majority decision also concluded that the adjudication service of the WRC is not repugnant to the Constitution because it found that the administration of justice is limited.
Limited administration of justice is permissible under Article 37 of the Constitution. While the Zalewski judgment was supremely helpful in clarifying how the administration of justice can be achieved within the parameters of the Constitution, in the case of this Bill it required a fundamental redesign of how the provisions relating to administrative sanctions would work at quite a late stage in original drafting. The main changes introduced on foot of the Zalewski judgment have been around ensuring that adjudication officers are independent in their functions, that the process of adjudication and the process of investigation are separate and distinct, and that the procedures surrounding the imposition of administrative financial sanctions are clear and transparent.
The Bill also provides for court confirmation of the decisions of adjudication officers and the ability to appeal those decisions. The delay in bringing this Bill to this House is regretted but it was imperative that this directive was transposed in a way that is constitutionally solid and that provides our competition authorities with the tools they need to effectively challenge anti-competitive conduct.
