Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank the Senators for their contributions to the debate which dealt with virtually every aspect of the Bill. Senator Hayden asked the fundamental question whether the whole will be greater than the sum of the parts and questioned whether the merger of these two bodies was a good idea. There is diverse practice across the European Union but I am firmly of the belief that it is a good idea. They both deal with market oversight, and the markets are becoming more complicated in many ways, with a move to trading online. There is a sharp distinction between barriers to entry, dominance and collusion versus fair practice, which the National Consumer Agency oversees. Those boundaries are beginning to blur. The pragmatism of the National Consumer Agency needs to be brought into the legalistic approach of the Competition Authority, and the merger of those two bodies gives a different perspective on the market. The same market is being viewed through different prisms with the aim of protecting the consumer, having freedom to establish in the marketplace but also to have fair practices and standards. Bringing those two together delivers gains. We will have the strong enforcement powers, the legal backup and economic analysis that has been traditional in the Competition Authority but also the feet on the ground, good consumer connections of the National Consumer Agency. I believe that merger will be beneficial and will result in more pragmatic responses to challenges that arise. That is the fundamental first section.

There was not much consensus on the grocery trade area. With his background Senator Quinn brings to the debate the suspicions of some retailers as to whether this is all about Government adding regulatory burden. I do not believe so. As I said in my opening statement, this has come from at least two studies of the grocery trade by the Oireachtas committees and a belief that unfair practices are going on where smaller suppliers seeking to deal with very large supermarkets are in a David and Goliath situation and custom and practice has grown up whereby unreasonable demands are put on small suppliers in the context of special promotions or so-called hello money, which as the Senator pointed out has already been banned. Practices have grown up in that sector, whether it be changes in forecasts or abrupt changes in conditions that have given rise to concerns. It is not just in Ireland that those concerns have emerged. They are in the United Kingdom also. Much of the model has derived from the UK approach where they have also seen the need to have fair trading rules in respect of the grocery sector. Across Europe there are different views. The Senator advocates the voluntarist approach attempted, and I do not know with what success, in France.

We tried very hard, in the time of my predecessor when Mary Coughlan was Minister, when John Travers was appointed to bring the sides together to seek a voluntary agreement but there was no sign of any such voluntary agreement emerging. The hope that there a meeting of minds of the two sides evaporated some time ago.

Clearly there was a commitment in the programme for Government, reflecting a concern in the Oireachtas from all parties, on the need to put in place the power to have written conditions that they would not be changed at short notice, that there would be a requirement on large retailers to have compliance officers, that the commission would have the power to issue compliance notices and take action off its own bat or on foot of evidence if it considered unfair practices were occurring. That debate had raged. While Senator Feargal Quinn offered one side of it, other Senators have indicated the difficulties small suppliers face in getting access and the need to have some assurance of fair treatment.

Senator Sean D. Barrett said there are no competitive problems in the grocery sector and that it is easy to enter. It may be easy to set up a shop - corner grocers are easy to set up - but the issue is whether the supply chain is fair and if that corner grocer would get a fair shake in access from large-scale wholesalers or whether they are facing unfair conditions. We have sought to be fair-minded in ensuring that the supply chain between the small retailer and the supplier or between the small supplier and the large retailer are being encompassed here. I look forward to the debate on this issue.

Both Senator and Senator Quinn had a go at the National Consumer Agency promoting the idea that one should shop around. I do not agree with either Senator. I think this is core to their business. I do not know whether Senators read any of its reports and whether they show, for example, the difference between the cost of getting a will written by legal representatives in different parts of the country and, indeed, in the same neighbourhood. There are huge gaps of four and five times the cost, depending on who one goes to. The same applies in terms of their financial comparisons, when comparing insurance products or different products across different providers. The message it gets out, not just to shop around but underpinning that with surveys of comparative prices is a real public service.

Sadly, people in Ireland do not switch. Switching is a very infrequent practice here. We are used to staying with the same accountant, the same bank and so on. We need a better informed consumer. The agency has sought always to draw attention to the very valuable information contained in its surveys which does not get enough coverage in the media. I am not a big fan of just advertising but encouraging people to look at alternatives is part of what we need to do, particularly when many people are under pressure and need to get the best deal. If we can make it easy for them to find the best deal that is an advantage.

Many people, including Senator Mary White, asked when is media ownership too large and said we have not answered that question in the Bill. Speaking as an economist, there is no neat definition of when any market is too concentrated because the first issue is to define what market one is talking about. One could say that the market for restaurants in the North Strand is very concentrated as there is only one of them. Everybody knows that one can go from the North Strand to Fairview where one can find another half dozen. One has to decide what market one is talking about. That element of judgment will always come into play in comparing, particularly in the media case, where we have not only print media, broadcast media, social media and umpteen different sources. A balanced judgment has to be made, having consulted through the broadcasting authority with various interests, that one does not stick rigidly to some view that once one hits 41% one is in the red zone, whereas if one is at 39% one is in the green zone. I do not think that is the way it works. Senators are seeking for something unreasonable to be inserted in the legislation as we would be bound into definitions that would not be sustainable in a changing market.

Senator Paul Bradford raises the bigger issue of growing media ownership. I do not know what he is inferring. Clearly, the line has been taken that we seek to regulate media mergers. We do not seek to regulate the organic growth of an individual business but where that business seeks to take over other players and thereby create a bigger market share - that is where we are seeking to regulate such mergers - not just in the narrow competition sense, which we have always done, but in the broad public interest which we have done in the past through my Department. We will do it now in a broader way through the Department of Communications, Energy and Natural Resources. That is the approach we have taken. Where one business grows and becomes stronger than others, that has not triggered any action in Irish law unless it abuses its dominance. When it becomes a dominant player a different set of rules and expectations are automatically imposed on it and the Competition Authority oversees these. If a big player is dominant and proceeds to take action to wipe out some other small player, then the authority will take action.

We have not sought to regulate ownership in itself, in other words, breaking up companies. That would be a much bigger debate and would be tricky territory to get into. I would be interested to debate this issue on Committee Stage. We are implementing faithfully the approach adopted by the advisory group and adding in the general welcome from the Seanad of giving this to the Minister for Communications, Energy and Natural Resources because of the diversity involved. There is no longer a narrow market place of newspaper media. It is a multi-dimensional communications issue where the Minister's Department and those agencies supporting him have a much better knowledge than mine. It is therefore appropriate that it would move to that Department.

Senator Mary White raised other issues as did Senator Sean D. Barrett as to whether there are problems with State services. It is perhaps good public policy that the price of cigarettes and alcohol is growing faster here than in other nations. That reflects public policy decisions. In examining State prices, one has to distinguish public policy decisions such as, for example, the decision to charge the economic price to those who are using hospital services as private patients. That is a policy decision as opposed to an anti-competitive practice. In looking at public prices, one needs to look beneath them and see what is going on. Of course, there are problems in the regulatory area. We have developed a regulatory system that needs, as Senator Barrett said, to be more attentive to competition and how competitive we are compared to other countries and also to consumer interests. That is one of the issues raised in the recent public policy statement from Government on the role of regulators. One of the directions clearly signalled is that a greater focus is required on the overall international competitiveness of the sector rather than looking at it in its narrow domestic context.

Senator Barrett referred to public service obligations as an indicator of protectionism. One can look at these in different ways. Clearly, if we want to promote renewable energy sources, which may not be immediately competitive in the marketplace but in the long term for other public policy reasons we want to see renewables in our grid, one has to create opportunities for doing so.

That is from where measures such as the PSOs and the re-fit prices have come. There can be good policy reasons for doing that.

In all of this debate, competition is not the only prism through which we view public policy. Senator White raised that issue, asking why the State should not be required to act on every Competition Authority recommendation. We have a rule that within nine months one must respond but we do not have a rule that one must act on it. For example, in a matter that is dear to many Senators' hearts, there would be a different view between the Competition Authority on sizes of retail outlets. Many want to see diversity and town centres thrive whereas, if one took a narrow competition view of the issue, one might ask why not have large out-of-town stores that are more competitive and charge lower prices. Sometimes public policy is looking at issues other than purely the competition perspective, and that is correct. As Ministers, we must take a broader view. The Competition Authority or, as it will be, the commission, is an important voice to hear, but it is not the only voice. By bringing the consumer end more clearly into the picture, one will get a better, more rounded view. Of course, every piece of legislation now goes to those authorities where it bears on their remit and they get a chance to influence it at the time it is being formed.

Senators Imelda Henry and Michael Mullins raised the issue of alcohol in the context of price. This has been a matter of debate and it was an issue in the other House where some Deputies wanted to see a reversion to the old groceries order where the invoice price of any trader would become the floor price, for example, if one sets an invoice price on one's invoice, then no retailer could go below that. I am totally opposed to that. That is not the right way to go. Effectively, that is what we used to call, as Senator Barrett will remember, resale price maintenance. It was a significant anti-competitive tool. If one could tell a retailer that one could not sell any cheaper than price X, it was a way of guaranteeing one's price. It was a complete denial of competition and it militated against the consumer. I do not support any reversion to that. In the context of alcohol, there is a specific case which is being viewed not only on narrow competition grounds, but on public health policy grounds, that the availability of cheap alcohol has got out of hand and we need to do something about it. That will come in but not in the context of competition law because it is not about competition but about protecting people from the abuse of alcohol. I recognise there is a much wider range of issues there that will come into play but they do not have a place in this Bill and they will be developed separately.

Senator Reilly said there was no mention of agreements with Irish Water. I understand the provision for those are in the Irish Water legislation, and there can be agreements. Our authorities do take an interest. The intervention by the National Consumer Agency in respect of some of the practices of the refuse collectors in Dublin was timely and important because some of the contracts being used by refuse collectors were unfair to consumers. Having agreements and being in the position to hammer out agreements with agencies to ensure that fair treatment goes into the contract will remain an important issue for the commission in the future.

Late payments, as Senator Michael Mullins stated, is not being provided for. It will be in the regulations rather than provided for in primary legislation because that would not be correct.

The issue of bargaining by professionals has come up on a number of occasions. The Competition Authority, based on European competition law, is clear that if one is an undertaking and one seeks to agree a single price, that is collusion. That is not allowed by an undertaking. It is a different position from a worker who is seeking to negotiate as a worker in an employment who is obviously allowed to negotiate price. An important line is being drawn between the ability of the State to consult with professionals, but it is the Minister, not the professionals, who sets the price. That is an important line that is drawn not only in Irish competition law, but in European competition law. It is one line that is important to uphold and it is being done here.

Senator Barrett asked about the number of staff. On paper, there are 60 staff in the consumer agency but it is certainly not up to that level. Senator Reilly raised the issue of manpower to accompany the new powers. We are putting the manpower in place and additional staff are being recruited to enforce the Bill.

The Communications (Retention of Data) Act 2011 is the policy of the Minister for Justice and Equality, Deputy Fitzgerald, and amendments to that Act will fall to her. I will not try to come up with something in the next couple of weeks.

I think I have covered most of the issues that were raised. I look forward to Committee Stage when we can get under the bonnet of the Bill and see how we can drive it along.