Brendan Howlin (Wexford, Labour)

This debate is important and it is a useful consideration. The Minister of State has only a passing interest in the Competition Authority, but as he is the only Minister present, he might pay some attention to what is being said.

The operation of the Competition Authority should be closely analysed. It beggars belief that the Minister produced this amendment. If one was to read this amendment and the Minister's speech tonight one might think that everything is perfect and that we have the most vigorous competitive environment in the world, the most robust law and therefore the most competitive society, but the proof of the pudding is in the eating, and it is clear in the list of prosecutions that whatever power the Competition Authority has is not being exercised. How many convictions have there been? We should get these facts.

The Minister mentioned the power of the Garda Síochána. The law is so robust that when the Competition Authority and its sleuths are finished, there will be divisions of the Garda Síochána to ensure competition. How many specialist gardaí are there dealing with competition policy and law? What prosecutions have the Garda Síochána been involved in and how many investigations have taken place? Where is the proof? Let us see it.

I wish to deal in particular with the issue of predatory pricing. The Minister talked about this matter all this past summer, although I am not yet sure of his opinion. He is constantly content to attack the Opposition's view on such matters but I am still unclear of his transparent view of the issue. I thought I would know at the end of the Minister's speech tonight where he stands on predatory pricing, but that was not the case.

Predatory pricing is defined as "reducing prices below their market value as a competitive weapon to drive weaker competitors out of the market". The definition of "fair" market value is the cost price with some reasonable profit margin. One might think that predatory pricing is unlawful, as the Minister seems to believe, but it is not, as the Competition Act 2002 only prohibits acts where there is an abuse of dominant position. According to the Competition Authority, section 5 of the Act prohibits the abuse of a dominant position, but it does not prohibit the attainment of a dominant position. A firm is considered dominant when it reaches 40%, according to one court case, but the Minister has stated that there could be a localised dominant market. It was argued that being prescriptive with the legislation was to weaken it. Is the idea that the definition of dominance should be a State secret? This is the first time I have heard a Minister state that an Act will be weakened through clarity and that it will be stronger by being unclear.

Is it considered abuse of a dominant position when a firm can raise prices unilaterally because it knows that customers have few, if any, satisfactory alternative sources of supply? Is it so if a person has little option but to pay the higher price? We do not know. The Act is not breached when a firm's vigorous competition lets it sail away from less efficient rivals. This is apparently robustness in the market. If a strong player crushes opposition by what is perceived as fair means, it is not labelled as predatory pricing. The Government has committed to outlawing predatory pricing, but I do not know how it will be done. The Minister's reliance on section 5 of the Competition Act 2002 is of concern.

I wish to mention the attitude to the groceries order, and the Minister's views are particularly interesting. According to anybody who is asked, the Minister has abolished the groceries order, although it will come as a shock that the groceries order has not been abolished. Just because one says it like the queen of hearts does not mean it happened. The Taoiseach confirmed to me in the House last week that this would require primary legislation. The Taoiseach also said reinstating some of the elements of the original groceries order that we do not wish to abolish would require an amendment to the Competition Act 2002.

After all the fanfare and ballyhoo and the brazen effrontery of the Minister in attacking Deputy Hogan for not knowing and changing his position on the groceries order, what is the Government's position? The Government will abolish the order some day and will replace it with something. It will not be this year as legislation will clearly not be enacted in 2005. It will be replaced by amendments to the Competition Act 2002 but we do not know what they are. This is not clarity on competition policy or knowing where one is going. It is a pity the Minister is not present to answer these questions. Perhaps he will get around to doing so before the close of the debate.

I am in favour of competition as it is extremely important. We have seen its benefits in terms of air fares which is the quintessential example everyone points to. However, I do not believe in a market that is entirely unregulated and where competition is the only objective and goal. It is important to say that there is sometimes a need to regulate in the common good. The view that restricting, inhibiting or preventing competition is always bad must sometimes be addressed as one can act in the public interest to inhibit competition. This is not so in all cases but it is a point of principle I wish to put on the record.

There is an important qualification of this presumption. I believe in the regulation of markets in the common good and interest so that we do not have dominant players predating on weaker players, suppliers squeezed out of the market or a lack of consumer choice. It is a normal consequence when an industry, such as the taxi industry, is deregulated that regulations are put in place to ensure some referee is in the market and that it is not completely dog eat dog. This is something that needs to be said before we adopt the notion that competition should not be qualified or that open and unbridled competition is intrinsically good in all circumstances and at all times.

This Fine Gael motion addresses the issue of time limits on the Competition Authority's responses to complaints. Deputy Hogan has suggested a timeframe of 30 days, which is modelled on the United Kingdom's enactment concerning the Office of Fair Trading. The idea to have a timeframe for an initial response is good. Not all investigations or complaints can be processed in a period of 30 days, which is not the Deputy's intention, but a complainant could get some response in that time. I spoke to an individual today who has been pursuing a complaint about anti-competitive behaviour by a major corporate body for eight years. This is not good enough. There must be some finality even if it is by way of explanation about the complexities of investigations.

We could usefully debate the role of the Competition Authority. Under legislation, it seems there are three pillars of activity, namely, advocacy in terms of competition, dealing with proposals for mergers and acquisitions to ensure they are not anti-competitive and enforcement. I do not have the time to develop my points but, in terms of advocacy, one could say the Competition Authority has done a reasonable job. We could debate whether the authority has been effective in all circumstances in the vetting of mergers but, by and large, one would give it a positive mark. However, in terms of enforcement, the judgment I must bring to bear at this point in time is that the authority has not been robust. Part of this is a resource issue and part is a build-up and gradualist issue so that we can come to terms with the requirements of a competitive environment.

I will cede my last five minutes to Deputy Lynch. I am shocked by the level of complacency witnessed in the Minister's attitude to this motion. It was not one of engagement with real issues in which we must work together as an Oireachtas to make our market environment function in the better interests of consumers. I regret that this is the Government's response.

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