Jerry Cowley (Mayo, Independent)
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Question 391: To ask the Minister for Enterprise, Trade and Employment if forthcoming changes to the Competition Act 2002 will prohibit predatory pricing as an anti-competitive activity when carried out by a firm that is not dominant; and if he will make a statement on the matter. [35567/05]

Micheál Martin (Cork South Central, Fianna Fail)
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I have previously advised the House that I consider predatory pricing to be an abusive and anti-competitive practice that acts against the interests of consumers. However, it is a tactic employed by a firm that is dominant in its market and involves the sale of product below cost for a prolonged period of time in order to damage or eliminate a competitor.

Predatory pricing is, therefore, a practice that is considered, both in national and international competition law, to constitute the abuse of a dominant position and is prohibited by both section 5 of the Competition Act 2002 and Article 82 of the EU Treaty.

However, predatory pricing should not be confused with other forms of low cost selling, such as for promotional reasons, to dispose of old stock, or to match a competitor's prices.

The penalties under the Competition Act for any undertaking found to have engaged in predatory pricing, up to €4 million or 10% of the company's turnover, are much greater than those which apply under the groceries order. Further, the Competition Authority has extensive powers and a dedicated division of expert staff to investigate allegations of companies abusing a dominant position.

It is also important to stress that dominance under section 5 of the Competition Act can be measured either in the State or in any part of the State. I believe, therefore, that the Act is sufficiently flexible to allow the Authority and the courts to tackle predatory pricing in all circumstances including, for example, small local market, without the need for additions or amendments the Competition Act.

Chapter 7 of the report on the groceries order prepared by my Department addresses theissue of predatory pricing in some detail and I urge all parties to read it. It can be foundat www.entemp.ie/publications/commerce/2005/ groceriesorder/chapter7.pdf.