Pat Carey (Dublin North West, Fianna Fail)

I will concentrate on the bigger picture as some of my colleagues opposite might want me to do.

I believe in open and fair competition. It is a vital element of ensuring a good deal for consumers here as well as developing a successful economy. Greater competition in the economy stimulates innovation and efficiency among business. It enables consumers to buy goods and services at the best possible price and enhances overall national competitiveness. Companies that compete to win our business provide an enhanced service and variety and generally become more responsive to our needs as consumers. At the same time, competition drives companies to cut their costs and find more efficient and productive ways of doing business.

The promotion of competition in the economy requires an effective legal framework. The Competition Authority, set up under the Competition Act 1991, reviewed by the Competition and Mergers Review Group during the late 1990s and reinforced in the Competition Act 2002, forms the sound legal basis required to safeguard this competitive process. In fact, the 2002 Act is regarded as one of the most modern pieces of competition legislation in the world and among the most robust.

The Competition Authority is one of the most empowered, proactive and successful enforcement agencies of competition law in Europe. The resources available to the authority are kept consistently under review to ensure the organisation keeps pace with the demands of enforcing competition law in a fast-growing economy. Currently, the authority has a staff complement of 52 and an annual budget of €5 million. I understand discussions on current requirements are ongoing with the authority.

The Competition Authority was the first enforcement agency in Europe to secure a criminal conviction for a competition offence and, to date, has obtained five such convictions. In 2004, the authority secured its first successful abuse of dominance case in the High Court. These actions, combined with the authority's cartel immunity programme and recruitment to the ranks of the authority of gardaí with powers of arrest and detention for competition offences, have had a significant impact in combating cartel membership in Ireland. Of course, enforcement of the Competition Act is not just about taking prosecutions. Deterring and preventing breaches of the Act in the first place is more effective and cheaper than prosecuting breaches.

This debate has been instigated by the Government's decision last week to repeal the groceries order. That is a decision which I welcomed and support. The order is anti-competitive and anti-consumer. Its repeal is a good example of this Government's drive for increased competition in our markets. The order was originally designed to outlaw predatory pricing. Predatory pricing, as has been explained, is a tactic employed by a firm that is dominant in its market and involves the sale of a product below cost for a prolonged period to damage or eliminate a competitor. In this way, it is anti-competitive and acts against the interests of consumers and the economy as a whole.

The problem with the groceries order is that it has shown to be an unsuitable vehicle to prevent predatory pricing. It was unable to make the distinction between legitimate low prices and genuine anti-competitive acts. What we must realise also is that specific provisions are already contained in the Competition Act to outlaw this sort of anti-competitive practice. If any individual business or group of business believe they are being harmed by predatory pricing, they may make a complaint to the Competition Authority which has the powers to investigate and take legal action, including by means of seeking a private injunction in the High Court to stop the illegal activity and seek compensation in the courts for any damage done either following a successful authority court case or as a private right of action.

The penalties for any undertaking found to have engaged in predatory pricing are up to €4 million or 10% of the company's turnover. They are very substantial penalties. It must be borne in mind that such penalties are much greater than those which applied under the groceries order and are likely to act as a real deterrent to any business contemplating predatory action. At the same time, the repeal of the order will reduce prices and therefore ensure a better deal for consumers.

I do not wish to be provocative but Fine Gael cannot have it both ways. I cannot make my mind up as to where it stands because I read Deputy Hogan's position and that of his colleague, Deputy Naughten, on competition and the groceries order. I do not normally accuse the Fine Gael Party of much but I accuse them now of scare-mongering. I must also express a degree of concern and disappointment at a statement issued yesterday by RGDATA and can only suggest that RGDATA is in the queue in scare-mongering as well. Telling people that the Competition Act does not cover predatory pricing is totally untrue. As everyone knows, to partake in predatory pricing a company must be in a dominant position and to abuse a dominant position is illegal under section 5 of the Competition Act. In fact, to protect any company or shop, no matter how small, dominance does not have to be measured on a national scale. It can be measured in any part of the State under the Act.

Predatory pricing is quite rare and is so expensive for a company to engage in it is not guaranteed to succeed. There is a huge difference between predatory pricing and competitive pricing and by removing the groceries order, this Government has made the market more competitive and removed any barriers to passing on discounts to the consumer. The groceries order was not a suitable vehicle to prevent predatory pricing. Fine Gael knows that. The Competition Act 2002 outlaws predatory pricing and the provisions that are based on EU treaty law state that. There is case law in Europe to support the use of these provisions to prohibit predatory pricing. Chapter 7 on predatory pricing in the report on the groceries order sets out the detail. When we debate this matter in the House let us at least debate the facts and not indulge in political opportunism and gamesmanship.

I want to make it clear also that I do not accept the Opposition's proposals on the category of super complaints. There is nothing stopping anyone from making a complaint to the Competition Authority. As I and other speakers have outlined, the legal framework and relevant authorities exist to combat all forms of anti-competitive practice, no matter which industry is involved. For example, the studies undertaken by the authority in banking, insurance and engineering were all extensive and serious investigations and are all bearing fruit, leading to substantial and significant reforms. To be effective, however, the Competition Authority needs evidence rather than mere suspicion of wrongdoing. It is important, therefore, that complainants to the authority provide as much information as possible.

The issue of competitive pricing and the need to combat excessive charging must be and are taken seriously by the Government. By addressing the high cost of motor insurance, it has facilitated a reduction in insurance prices. The Competition Authority has studied and commented on sectors as diverse as pharmacy, grocery retail, electricity, alcohol retail, ports and bus services outside Dublin, and on general issues such as retail planning guidelines, class action law suits, and enterprise and consumer policies. An extensive study is under way into aid professions.

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