Seán Kyne (Galway West, Fine Gael) | Oireachtas source

The Competition and Consumer Protection Bill has been most eagerly awaited. The necessity of the change has been impacted by the economic changes which have taken place in Ireland since the 1980s when markets were liberalised and opened up with the completion of the Single Market. Many of the provisions of the Bill are commitments which can be found in the programme for Government and the Action Plan for Jobs.

At individual level, consumers are at a total disadvantage when it comes to the balance of power. Even when acting together, a considerable critical mass of consumers is required before the balance of power tips in their favour. Information is imperative to assist consumers. A strong advocate to act on behalf of the interests of consumers collectively is also essential. The current framework has not been adequate.

It has been a source of irony how elements of competition law have negatively impacted on consumers. An example is telecommunications in Ireland, with particular reference to Eircom. The objective behind privatising Eircom was to comply with EU competition law and to provide consumers with greater choice. It was also assumed the private sector would provide the finance necessary for investment in services such as broadband. We now know the privatisation of Eircom has not worked out well. The inclusion of the entire communications network, along with the company, in the sale continues to impact negatively on communities throughout the country 15 years later. The coinciding of Eircom's private ownership with the property boom took away focus from investment onto the profitable sale of the company's property assets. With the recession, the company was unable to provide the investment required for improvements to the network and it was only last year the company was able to launch the eFibre broadband programme for areas outside the main cities. Added to this were the restrictions placed on the company from aggressively competing until its market share had fallen below a specific percentage.

If all consumers, including householders and businesses, had access to the same number of service providers and the same level of choice and service, this would not have been a problem. However, the fact is that hundreds of thousands of consumers have been negatively affected by the evolution of the telecommunications market in Ireland. Particularly affected have been consumers in rural towns, villages and areas where the main broadband competitors such as UPC and UTV were not, and are not, available. A process that was supposed to provide greater choice, better service and more competition did nothing. Rather, consumers became victims of competition. They were supposed to be the beneficiaries but instead ended up the casualties of laws and actions, at EU and national level, intended to improve consumer choice and service. The Bill is an opportunity to learn from the mistakes of the recent past and ensure we have an organisation in the competition and consumer protection commission which is able to raise issues such as this, publicise them, act on behalf of consumers and play an important role in finding and implementing solutions or advocating changes to legislation.

Another interface between competition law and service provision to consumers is state aid. In the Single Market state aid is eyed with suspicion and is deemed incompatible with the Common Market and a threat to competition. Once again, however, this view ignores the realities of a country with a population density such as ours. It is undeniable that certain services just would not be provided without the support of the State. In the early decades of the State, the provision of electricity, public transport, health care and telecommunications occurred because of State support and intervention. While the situation has changed in many sectors, there remain some services, such as the provision of high speed broadband in rural areas or the provision of transport services such as air and ferry to our islands, which require and rightly receive state aid.

The national broadband plan stated the service would be put out to tender and broadband would be provided to the most remote and rural areas, but unfortunately the service has been very poor. In the new mapping which is taking place, we must ensure state aid is allowed to provide support for the most rural areas where the market will not provide such support. This is being examined and the Government is in discussions with the European Commission.

I do not view financial savings as the sole rationale for merging the Competition Authority and the National Consumer Agency. Rather, I believe the purpose is to create a stronger organisation to provide competition and champion the rights and interests of consumers. This should apply to consumers irrespective of where they reside and should take into account how actions and policies concerning competition can have different effects on different locations.

Consumer rights and health competition are inextricably linked. I agree with the suggestion in this Bill's regulatory impact analysis that the newly merged body will be stronger and more co-ordinated and will have benefits for the consumer.

This Bill is also necessary because aspects of existing competition law have proven to be inadequate. The groceries order, which was introduced in 1956, was further strengthened in the late 1980s following the collapse of the H Williams chain of supermarkets. Among its provisions was a ban on below-cost selling of food and alcohol. The order was the subject of much debate and controversy before it was removed by the Competition (Amendment) Act 2006. There remains a ban on below-cost selling of food, however, by virtue of the Competition Act 2002. This will seem perplexing to many people, given that large supermarkets were able to sell Irish-grown vegetables at a fraction of their true cost before Christmas 2013.

Retailers, particularly those known as the multiples, drive down the price of fresh food at the expense of producers. We know that Irish farmers receive a fraction of the price that is paid for food, with milk being a prime example. There is a clear dominance and imbalance of power in the relationships in the grocery sector. The Joint Committee on Agriculture, Food and the Marine argued in its recent report on the grocery goods sector for the introduction of a statutory code of conduct for the sector, with an independent supermarket ombudsman. I appreciate the rationale for this. However, the Bill before the House proposes instead to empower the Minister to make regulations on certain aspects of commercial relationships. I hope the Minister will not be slow to introduce such regulations.

Legislation like the Bill we are considering, is important for the food industry, producers and retailers. The responsibility of consumers to be aware and informed is equally important. If they ask questions about the origin of food, the production of food and the proportion of the price being paid to producers, and make informed decisions on that basis, large retailers will have to take note. The effect of consumer power can be seen clearly in the case of the discount retailers. The wishes of Irish consumers to purchase quality food products that are locally sourced or produced has led to Aldi and Lidl changing their business practices in Ireland and in other European countries. Other supermarkets have recognised this by augmenting and increasing their support for Irish producers as a result of the increased competition in the sector.

Media mergers are also addressed in this Bill. Media ownership has been an issue since the first newspapers rolled off the printing presses. This issue has evolved distinctly in different countries. For example, public service broadcasting in Europe is different from such broadcasting in the US. On this side of the Atlantic, public service broadcasters such as the BBC have been viewed as integral parts of modern society. Raidió Teilifís Éireann played a significant role in building our nation. It was important for Ireland to have its own radio station and television service.

Just as the organisation of the groceries sector and the provision of food have changed since the late 1980s, so too has the media sector. The introduction of independent local radio stations has brought about a welcome plurality. All businesses go through stages of start-up, growth, expansion, consolidation and maturity. Media businesses, whether in print or in broadcasting, are no different. The economic uncertainty of the past five or six years and the changing business models have accelerated consolidation. Newspapers have merged and radio stations have been acquired. The issue of media ownership has grown in significance in tandem with this. The effects of the concentration of ownership in the hands of very few people have the potential to be highly negative.

This Bill is not about controlling the media or about censorship. It is about ensuring fairness, transparency and equality, all of which are essential ingredients for a democracy. The growth of social media, facilitated by the Internet, has also been revolutionary. It has broken down entry barriers, encouraged and opened participation and lessened the power of old media. The task of regulating and providing oversight in the common good is becoming increasingly complicated. It is not something that many governments have been able to grapple with successfully. It is startling that 21 EU member states have no special rules for media mergers. Ireland is leading the pack on this issue. I hope the legislative process can be better at keeping pace with the changing communications landscape.

The proposed competition and consumer protection commission has been described by the Minister, Deputy Bruton, as "a powerful watchdog with real teeth acting to protect and vindicate consumers". The Minister has indicated that a new criminal investigations function will be added to combat white collar crime. Only time will tell if this comes to pass. I hope it does because it would ultimately be to the benefit of everyone in the community.

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