Dáil debates

Wednesday, 9 November 2011

Competition (Amendment) Bill 2011: Second Stage (Resumed)

 

1:00 pm

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Fine Gael)

That may possibly occur. Who knows? I welcome the improvements in the Bill. The legislation was committed to under the EU-IMF agreement and was introduced in the third quarter of this year. It helps to strengthen the enforcement of competition law and provides more effective deterrents for individuals or organisations engaged in anti-competitive practices. It is extremely important that we see an improvement in the detection of offences by organisations involved in cartels and anti-competitive practices and that these organisations be prosecuted and subjected to the full rigour of the law. Many offences have been detected but, to protect consumers, we need to see more high-profile cases coming before the courts.

The Bill makes practical changes to competition law. The maximum prison sentence has been increased from five years to ten where an individual is indicted for hard-core competition offences such as the setting up of formal price fixing or market-sharing agreements. Under the Competition Act and the operation of the Competition Authority, a cartel immunity programme is available. It is helpful for any individual or organisation who wants to be a whistleblower and bring a matter to the attention of the Competition Authority to avoid prosecution. Legislation on this general area needs to be introduced at a later date.

The legislation proposes that fines for competition offences will be increased across the board. Private individuals who are affected by anti-competitive practices will need to prove an action for damages against a cartelist once public enforcement proceedings have been successfully taken. In other words, the burden of proof will be eased for private plaintiffs taking on a follow-on case for damages. That is a new and positive provision in the legislation.

The courts can make a convicted undertaking liable for the costs and expenses incurred in relation to the investigation, detection and prosecution of the offence. Such court cases can be complex and considerable time, effort and cost can be involved in taking a case against a company. It is a good provision that the individual concerned will be made responsible for that. A person convicted of certain competition offences will not be eligible for probation. The Bill includes the dis-application of the Probation of Offenders Act 1907 to competition law offences. That is another provision that is an improvement on the current position.

A person convicted for the first time ever of a non-indictable competition offence cannot act as a company director. There have been cases in the past where that has happened and the people concerned continued on in their roles, but this provision will now outlaw that for the first time. The Bill provides for an amendment to section 160 of the Companies Act 1990. The court either on its own motion or on foot of an application from the Competition Authority or ComReg will order that a person shall not be appointed as a company director where he or she is guilty of infringement of offences under the Competition Act 2002, other than indictable offences which already result in automatic disqualification.

The Bill distinguishes between private enforcement and public enforcement of civil actions with regard to competition law and provides for separate public enforcement provisions to be taken by the Competition Authority. It also updates certain fines within the classifications contained in the Fines Act 2010.

Having regard to the state of our public finances, bid rigging by companies that agree to come together to bid for public procurement is covered in regard to the building of roads and schools. That is an important provision in terms of keeping an eye on the public purse.

Significant breaches of the Competition Act are viewed seriously. The Bill provides for an increase from €4 million to €5 million in the fine for indictable offences. The increases in fines and the provision of lengthy periods of imprisonment of up to five years will focus people's minds on this area and there are adequate deterrents in the Bill to persuade them not to get involved in practices that are indictable offences.

The Minister of States needs to examine the low level of detection of competition offences. Action needs to be taken on the more high profile cases, as the previous speaker said. The Competition Authority can prosecute offenders in the criminal courts or the civil courts and it examines the operations of cartels in particular. Irish Rail and Mayo waste companies were prosecuted, as were heating oil companies involved a cartel price fixing operation in Galway and other areas of the west in the recent past. Some of the fines imposed on these companies have been on the low side. Some of them were fined €5,000, €7,500 and €12,000. That increase in the level of fines in the Bill is an improvement.

The high level of professional fees, including solicitors' fees, doctors' fees and consultants' fees, is not addressed in this legislation but that issue must be tackled by the Government. We know from our constituency clinics and from knocking on doors that people find it difficult to keep up to date in the payment of their utility bills. Doctors' fees are €60 a visit, on average, and parents only bring children to the doctor now when it is absolutely necessary. The level of doctors' fees and consultants' fees have not decreased in line with the current economic circumstances and that issue requires attention.

Deputy Boyd Barrett referred to energy prices in terms of the ESB and Bord Gáis. That area also requires attention. It is subject to regulation but there must be a way of moving forward with the times and helping people who are in extreme difficulty. Another tough budget is on the way because the national accounts are not as good as they should be. We need to keep an eye on the cost of living for people and the various costs with which they are being hit. Will the Minister of State indicate whether there are there any large profile companies and cases pending, the statistics in this respect and how his Department monitors the position?

Competition is necessary and more competition is required in various markets. Anyone in business who is creating a dominant or monopoly position and not operating competitively for the benefit of consumers needs to be brought to task.

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