Micheál Martin (Cork South Central, Fianna Fail)

I thank Senators Leyden and Coghlan. I have been very consistent since the public announcement of the abolition of the groceries order and at no stage did I say I would be introducing legislation on predatory pricing. Almost from the date of that announcement we have been saying that there is already express prohibition in existing case law with regard to predatory pricing.

Senator Coghlan and I share the same objective. There is no argument over the fact that we do not want predatory pricing to have free rein. The legislation and case law in place is designed to prevent predatory pricing if and when it should ever occur. However, we are not in the business of protecting people from competition. That is a different issue and to a large extent the groceries order protected against competition and, in our view, kept prices artificially high because it created a price floor below which goods could not legally be sold. It allowed the development of off-invoice discounts. There was no transparency in how they operated. No one knew who was leveraging muscle. No one knew who was going to a supplier and demanding a bigger discount for putting the supplier's goods on the shelves.

Much is said about the groceries order but much is unsaid too. It did not protect as many small operators as people would like to believe. As the report demonstrated, 2,500 shops closed since the introduction of the groceries order in 1987. I accept that some went into the symbol groups and so on. That is a new and welcome trend in the grocery business and has introduced choice. However, nobody would argue with me that the growth of the convenience store is about price competition. By and large, it is about factors other than price. The garage forecourt shops have been the fastest growing phenomenon. We all go to such shops, knowing we are paying above the odds, paying more than if we went somewhere else. One is paying for convenience. One wants to walk around the corner to get a pint of milk, for example, rather than drive to some conglomerate and queue.

An operator, big or small, should not be protected from competition but should be protected from predatory pricing. We are making the point that European case law and the Competition Act 2002 prevent predatory pricing, which is an abuse in itself. I have taken legal advice and we are satisfied with that situation. I am assured that if we were to accept the amendment, the protection would be diluted because it would be taken out of the context of Irish case law, which would give rise to other uncertainties and interpretations.

I accept that dominance is a complex issue. It might be useful for the Seanad to go through what legal jurisprudence suggests, that a number of factors need to be considered in determining whether or not a firm is dominant. That was a key issue of Senator Coghlan's contribution yesterday.

I will mention some of the many factors just to give people an illustration of the complexity involved, and the fact that there are no simple black and white solutions to these issues. They include but are not limited to the following: relevant market shares; the level of concentration in the industry; the ability of the allegedly dominant firm to act independently of its competitors; absence of or lower countervailing buyer power; absence of potential competition; economies of scale or scope; overall size of the undertaking; product or service diversification; easier privileged access to capital markets or financial resources; control of infrastructure that is not easily duplicated; technological advantages; a highly-developed distribution and sales network; product differentiation; vertical integration; barriers to entry; and barriers to expansion.

That is a fairly broad range of criteria. Different episodes can arise in different contexts. For example, the Drogheda newspapers case was alluded to in the House yesterday, but it would be wrong to extrapolate from that case generalities about how the law is applied in any example of predatory pricing. We need to be careful that when the Competition Authority goes to adjudicate on various allegations or assertions, it uses a wide range of criteria. The courts will also use a wide range of criteria before determining whether someone is engaged in either abuse of a dominant position or in predatory pricing. We need to be aware of the complexities of the issues. It would be wrong if we did not take due cognisance of existing case law on the subject and the European Union legal context within which we operate. We are satisfied from the legal advice received that what is now in place is far stronger than that which the amendment would achieve.