Richard Bruton (Dublin North Central, Fine Gael)

The purpose of the Bill is to strengthen the enforcement of competition law in Ireland. Breach of competition law is a white collar crime and, as with all other forms for crime, those who commit it must be punished accordingly. The legislation will provide a more effective deterrent and an improved sanctions regime for those who engage in price-fixing, cartels, abuse of dominant position and other anti-competitive practices. Under the terms of the EU-IMF programme of financial support for Ireland, the Government was required to bring forward legislation to strengthen the enforcement of competition law by the end of the third quarter of 2011. I am happy to inform the House that the publication of the Bill on 29 September met this commitment.

In terms of competition law enforcement, we are not starting from scratch. The measures I propose in the legislation build on what is already a strong enforcement regime. Ireland is unique in Europe in having criminalised anti-competitive behaviour. Since the introduction of the Competition Act in 2002, the Competition Authority has a good record. From the point of view of other member states, the authority's record is enviable. A total of 32 criminal convictions have been secured since 2002 in respect of cartel behaviour in the form of price-fixing by home-heating oil companies in the west and by car dealerships in Leinster and countrywide.

Crimes under competition law are often viewed as being victimless in nature. However, where the operation of the free market is restricted by collusion or other nefarious practices, the result is that consumers, whether it is to heat their homes or purchase cars, pay more than should be the case. We all are the victims of such crimes. The State and the Members and I as taxpayers are the victims if companies engage in bid-rigging in respect of public procurement contracts for the building of roads, for the fitting-out of hospitals and schools or, indeed, for any of the services purchased by the State.

During the sentencing in 2007 in a price-fixing case, Mr. Justice McKechnie stated that the crime in question was particularly pernicious as it was against consumers in general and not just one or two individuals, and went on to state the activities had, in his view, "done a shocking disservice to the public at large". I share Mr. Justice McKechnie's view that "there are good reasons as to why court should consider the imposition of custodial sentences in such cases". He stated, "I see no room for a lengthy lead in period before jailing convicted persons becomes commonplace under this legislation", and I agree.

Currently the courts can impose fines up to the greater of €4 million or 10% of turnover and impose a custodial sentence of up to five years. These are significant penalties making our enforcement regime one of the strongest and I look forward to the day when the rigours of the law are fully applied.

I wish to turn to the provisions of the Bill and explain what each is designed to achieve. Section 1, the definitions, and section 7, the Short Title, commencement and collective citation, are standard legislative provisions while sections 2 to 6, inclusive, are the core provisions of the Bill.

Section 2 amends the penalties set out in section 8 of the Competition Act 2002 and provides for large increases in fines for competition offences across the board. I propose to increase, from €4 million to €5 million, the fine for criminal conviction for hardcore offences and double the maximum prison sentence for such a conviction from five years to ten years. Fines for summary convictions are increased from €3,000 to €5,000 while the daily fine for a continuing contravention is also increased in respect of both summary and indictable offences.

As a further indication of how seriously I view these crimes, I propose that the Probation of Offenders Act 1907 will no longer be capable of applying to competition law offences. That Act allows a judge to dismiss a proven case based on the trivial nature of the offence, and in such cases a conviction is not recorded against the defendant. I see nothing trivial about price fixing, bid rigging or an abuse of a dominant position to the detriment of competitors and consumers alike. Judges will no longer have the option to apply the Probation of Offenders Act where the authority or the Director of Public Prosecutions has proven a case. The conviction will be recorded and the guilty party punished in accordance with the enhanced enforcement regime.

From detection to investigation to prosecution, bringing an offender to justice can be a long, complex and expensive process. Investigations can span years as evidence is gathered and examined in a forensic manner, and witnesses must be questioned and their statements scrutinised in detail to determine whether the behaviour breaches the Act and to build a case for the prosecution. This work is carried out by specialist investigators, economists and legal experts within the Competition Authority in association with members of the Garda Síochána, including the bureau of fraud investigation. The cost to the State in undertaking such a painstaking investigation can be sizeable. I therefore provide that the court shall order a person convicted of an offence under the 2002 Act to pay to the Competition Authority, or ComReg where the anti-competitive practices are in the electronic communications sector, the cost of undertaking the detection, investigation and prosecution of the offence. The court shall measure the costs and expenses. Where there are special and substantial reasons for not doing so, I propose that the court may decide not to order the payment of such costs.

Sections 3 and 4 result in the separation of the public and private enforcement regimes which at present are contained in a single section, section 14, of the 2002 Act. Section 3 strips the public enforcement right of action from this section 14, leaving it to provide for a right of private action for aggrieved persons, while section 4 re-casts the public right of action for the Competition Authority and ComReg.

In so far as section 3 amends section 14, an aggrieved person may bring an action in the Circuit Court or High Court for relief by way of injunction, declaration and-or damages, including exemplary damages, where he or she shows loss as a result of anti-competitive behaviour prohibited by section 4 or 5 of the 2002 Competition Act. Where, on foot of a private action under section 14 of the 2002 Act, as amended by section 3, a court finds that an undertaking has abused a dominant position, the court may require the undertaking to discontinue the abuse or to adopt measures for the purpose of ceasing or adjusting the dominant position by, for example, requiring the sale of assets of the undertaking. Clarity is also provided that the term "injunction" includes an interim injunction, an interlocutory injunction or an injunction of indefinite duration.

Section 4 inserts a new section 14A into the 2002 Act which gives the competent authority, whether it is either the Competition Authority or ComReg, a right to pursue civil enforcement measures for infringements. Mirroring the amended private enforcement regime which I have just described, the Competition Authority or ComReg also has a right to apply to the Circuit Court or High Court in respect of any agreement, decision, concerted practice or abuse that is prohibited under section 4 or 5 of the 2002 Act and in addition by Article 101 or 102 of the Treaty on the Functioning of European Union. Where a case is proven, the court may order an interim or interlocutory injunction or an injunction of indefinite duration or give a declaration that the behaviour in question is in breach of section 4 or 5 of the 2002 Act or Article 101 or 102 of the treaty. The court may also require the discontinuance of an abuse of a dominant position or require corrective measures to be taken by the undertaking.

Europe-wide there are well-recognised difficulties in pursuing private litigation for damages in respect of competition law breaches. I want to make it easier for persons to take such private actions in this jurisdiction. I provide that where following proceedings under Part 2 of the 2002 Act for a breach of section 4 or 5 or Article 101 or 102, a private litigant, taking a follow-on action in respect of the same breach, shall by virtue of section 5 of this Bill be able to rely on the court's finding of a breach and it shall not be necessary for the second litigant to prove also that the conduct was prohibited. By easing an element of the burden of proof facing a private litigant, I seek to facilitate an increased number of private actions, thus to some extent easing the burden on the State resources in pursuing public enforcement but also ensuring the State is a facilitator for subsequent private actions.

At present, a person convicted on indictment of a breach of competition law is automatically disqualified under section 160 of the Companies Act 1990 from being a company director or from being in any manner involved in the promotion, formation or management of a company. That section also provides for a discretionary disqualification for summary company law offences. In section 6 of the Bill, I propose that this discretionary disqualification provision be extended to all contraventions of section 4 or 5 of the 2002 Act and Articles 101 or 102 of the treaty. In keeping with the discretionary disqualification provisions set out in section 160 of the 1990 Act, the High Court may decide itself or on foot of an application by the Competition Authority or ComReg to make a disqualification order for such period as the court sees fit. This additional sanction will act as a deterrent for those engaging in or contemplating engaging in anti-competitive practices and ties in with the overall thrust of the Bill.

I want to send a clear and unequivocal message to business persons and consumers alike that anti-competitive practices will not be tolerated. Offenders will be prosecuted and feel the full brunt of the law. These new deterrents should give further pause to would-be and current cartelists and I strongly urge the courts to follow, where appropriate, the words of Mr. Justice McKechnie and to apply the full rigours of the law.

In addition to the measures set out in the Bill to meet the EU-IMF commitment, I inform the House of two complementary measures that will enhance the enforcement of competition law. On 3 October, I commenced the single remaining section of the 2002 Act yet to be commenced. Section 10 provides for the provision of certain documentary evidence to juries during trials on indictment for competition law offences but it could not be commenced pending the installation of the necessary audio-visual technology in court rooms. Such technology has now been installed, making it possible for jury members to be given transcripts of counsels' opening and closing statements and of the trial judge's charge to the jury along with any charts, graphics, etc. presented as evidence during the trial. As with any trial for white collar crime, complex evidence can be presented and the availability of documentary evidence will assist the jurors in their deliberations.

The second complementary measure I am pursuing involves the application of the provisions of the Criminal Justice Act 2011 to competition law arrestable offences. The Act is designed to deal with white collar crime and its extension to competition law will greatly assist the investigation of alleged breaches. Gardaí will be able to suspend the 24 hour detention period available to them to question a suspect. During such a period of suspension, evidence obtained during questioning can be examined and compared to other evidence gathered during the investigation. The suspect can be recalled for further questioning at a later date provided that, in total, the combined periods of detention do not exceed the permitted 24 hours.

Other sections of the 2011 Act that will apply to competition law offences concern the production of documents and the manner in which they are to be identified and categorised. Provision is also made for the determination of legal professional privilege issues arising from the disclosure of documents. I am working with my colleague, the Minister for Justice and Equality, on this matter, as he has ministerial responsibility for making the necessary order under the Criminal Justice Act.

Following the Bill's enactment, my next legislative priority in this area will be the consumer and competition Bill to give effect to the amalgamation of the Competition Authority and the National Consumer Agency, NCA. As both bodies were established under statute, it is necessary to give effect to the newly merged body by way of primary legislation. At its meeting on 5 July, the Government approved the Bill's drafting. Since being announced as part of the rationalisation plan for State agencies during the 2009 budget speech, my Department has continued to work with both bodies to ensure a smooth transition from the two separate entities to a single dual functioning body responsible for competition and consumer protection.

The Bill will also update the existing competition law on foot of a review of the operation and implementation of the Competition Act 2002, strengthen the public interest test in respect of media mergers in line with the report of the advisory group on media mergers, make some minor amendments to the consumer protection legislation and provide for a code of practice for doing business in the grocery goods sector.

While this all-encompassing approach to the draft legislation has to some extent delayed the legislation for rationalisation of the two agencies, we will be better served in the long run by a single legislative measure that establishes the new agency and provides for a combined and updated consumer and competition code. Deputies are awaiting publication of the Bill and may seek to avail of the opportunity presented by the Bill before us to progress issues contained in the other Bill. However, I urge them to wait. The matters to be included in the comprehensive consumer and competition Bill will be considered and debated in due course and, no doubt, in great detail, as is appropriate.

I look forward to working with Deputies on Committee and Report Stages of the Bill before the House and I will be happy to reply to questions that arise. In the meantime, I commend the Bill to the House.

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