We will recommence consideration of the Competition Bill, 2001. I welcome the Minister, her officials and the members of the committee. As you are aware, we have completed up to section 12. We are moving on to amendment No. 49 in the name of Deputies Flanagan and Perry. Amendment No. 51 is consequential and No. 52 is related so we will discuss Nos. 49, 51 and 52 together by agreement.
Competition Bill, 2001 [Seanad]: Committee Stage (Resumed).
It is now 1.15 p.m. and we have a number of amendments to debate. How long is it intended that the committee sit?
Last week I allowed as much discussion as possible. I was asked by members to allow discussion of certain matters which were seen to be relevant to the Bill. There are many sections and we jumped through some of them, but it was my understanding that members wanted to concentrate on the issues we discussed with a view to being able to expedite some of the other amendments. We have been notified that the matter will come before the Dáil on Wednesday for Report and Final Stages.
I understand it is Friday night. I am in the hands of the committee and I am available until any hour tonight. I know some members have other engagements - some are members of the Committee of Public Accounts, which I believe is meeting - so I am entirely in the Chairm an's hands.
I will try to go through this as quickly as possible, stopping at any point where people want to spend time discussing an issue. I suggest that in approximately two hours we see what progress we have made and we will either conclude or adjourn. In the latter case we may have to investigate fitting in a meeting on Monday or Tuesday of next week.
Certainly not on Monday. I am also conscious, as I am sure the Tánaiste and the Chairman are, of the traffic gridlock which will inhibit my safe passage to my constituency in Monasterevin this evening and of other infrastructural deficits which could cause problems. We will make a start and see how we are getting on at around 4 p.m.
I am not aware of that as the infrastructure in the part of the city I represent is very good. There is an excellent DART service, many quality bus corridors and many of my good friends, the taxi men, are prepared to carry one anywhere one wishes to go at very competitive prices.
We should make sure we have more competition.
I am not sure whether we have more taxi drivers. There may be the same number of people but using individual cars rather than sharing.
SECTION 13.
I move amendment No. 49:
In page 16, between lines 24 and 25, to insert the following subsection:
"(3) The Director of Telecommunications Regulation, the Commission for Energy Regulation and the Central Bank shall have a right of action under this subsection in respect of an abuse which is prohibited under section 5 or by Article 82 of the Treaty.”.
I was anxious to pursue in this amendment the concept of broadening the manner in which abuses are attacked with a view to enforcing the legislation in an appropriate and adequate way. The amendments envisage broadening the power of the Competition Authority to include other regulators, awarding them the power to pursue anti-competitive practice or alleged offences in their own areas, for example communications, electricity, gas and so on. The concept of a shared jurisdiction is one we do not have under the legislation. There is a danger that we might ensure monopoly status for the Competition Authority, which is in some ways ironic. It is in the public interest to allow for people such as the Director of Telecommunications Regulation to expand and broaden their powers so they are in a position to act in a similar way to the Competition Authority. I have not heard the Tánaiste speak on this matter but I expect she has certain views and is anxious to pursue the idea.
I can understand why Deputy Flanagan has proposed these amendments giving competition enforcement powers to the sectoral regulators. The mergers review group considered this matter but were strongly against any such action. Their recommendation was that exclusive jurisdiction in the administration of competition law should remain with the Competition Authority. I share that view. The powers proposed by Deputy Flanagan would lead to uncertainty, inconsistency and confusion. The most effective way of having a well-resourced, expert authority as provided for in this Bill is to concentrate such expertise in one body.
I agree that, in a small country such as ours, mergers of companies can have implications for the Competition Authority and for the relevant authorities of the companies involved. Some have argued for the creation of a super authority of regulators through which all of these bodies can be brought together. However, for the purpose of enforcing competition law, it is more effective for the Competition Authority to retain exclusive jurisdiction over these matters.
I will not press the amendment, but feel it is important that the situation be monitored, given the extra resources and powers that the Competition Authority will have. It will be interesting to see how these powers are exercised over the next couple of years and the effect the Competition Authority will have. I am prepared to give the benefit of the doubt to the Tánaiste. However, this is an issue to which we will come back at a later date.
Amendment, by leave, withdrawn.
I move amendment No. 50:
In page 16, between lines 36 and 37, to insert the following subsection:
"(6) Exemplary damages shall be determined by the Court and shall be not less than double the amount of damages awarded by the Court.".
The concept of damages paid out by the courts has not been broadened over the years, as it has in other jurisdictions. The concept of exemplary damages is hardly known to the Irish courts. Therefore this amendment is worth considering. It would give guidelines to the court on awarding damages, with upper and lower limits. This would replace the current situation, where awarding of damages is very much at the discretion of the courts.
While I am sympathetic to the objective of Deputy Flanagan's amendment, the courts are reluctant to award exemplary damages. I am sure the Deputy will acknowledge this, given his extensive legal knowledge. If such a restriction were put in place, the courts would be even more reluctant to award exemplary damages. Notwithstanding the objective of the amendment, it would achieve less and be counter-productive.
Amendment, by leave, withdrawn.
Amendment Nos. 51 to 53 inclusive, not moved.
I move amendment No. 54:
In page 17, subsection (9), lines 8 and 9, to delete "in pursuance of a decision of a statutory body" and substitute "pursuant to a determination made or a direction given by a statutory body."
Before we leave part 2 and move on to part 3, I want to indicate that, in light of previous discussions regarding presumption, I am examining that matter further. I will propose an amendment on Report Stage.
Amendment agreed to.
Section 13, as amended, agreed to.
Section 14 agreed to.
SECTION 15.
I move amendment No. 55:
In page 17, between lines 34 and 35, to insert the following subsection:
"(2) The acquisition of part of an undertaking includes the acquisition of assets which, although not a legal entity, constitute a business to which a turnover can be attributed.".
Will the Tánaiste respond to my proposal?
Deputy Flanagan's proposal is being examined by my Department and we hope to come back with a response to it on Report Stage.
Amendment, by leave, withdrawn.
Amendments Nos. 56, 57, 58 and 59 are related and may be taken together, by agreement.
I move amendment No. 56:
In page 18, subsection (6), between lines 25 and 26, to insert the following:
"(e) the undertaking acquired as a result of the transaction exclusively conducts its business outside the jurisdiction of the island of Ireland.”.
On the matter of international take-overs, it has been suggested that extra expense would be involved in the notification of agreements. This would occur in the area of international trading in particular. One must consider whether one is imposing undue expense on business. I have tabled this amendment with a view to minimising such expense and inconvenience.
I accept the principle of Deputy Flanagan's proposal. It is not true to say that every merger involving a company outside this jurisdiction does not have an effect on the market here. Coillte's proposed merger with Balcas, a company in Northern Ireland, had a direct bearing on the market here and was refused on competition grounds. I accept the essence of what Deputy Flanagan proposes, which is why I have put forward amendment No. 58.
What is the motivation here? Is it the complexity of the situation in Northern Ireland?
Yes.
Is it fair that, because of the historical drawing of a line across the top of this island, the IBEC companies are put to considerable expense and requisitioning of information? If Cement Roadstone Holdings acquire a plant across the Border there would be certain implications. However, if they did so through a company in Japan it would be a different story. I cannot see the logic in that.
That is correct. For the purposes of many markets, this is a single-island economy. The acquisition of a company based in Northern Ireland could have a detrimental effect. Coillte's plan to acquire Balcas was refused because of the effects of competition in this economy. Bearing that in mind, what we have sought to do is to insert amendment No. 58 to take on board the likes of CRH, Elan, the Kerry Group and other companies which have grown substantially through foreign acquisitions that have no bearing on competition in the Irish market. We want to limit the powers in this Bill to something that can have a direct impact on competition in the Irish market.
Amendment, by leave, withdrawn.
Section 15 agreed to.
Section 16 agreed to.
SECTION 17
Amendment No. 57 not moved.
I move amendment No. 58:
In page 19, subsection (1)(a)(i), line 7, to delete “€40,000,000, and” and substitute the following:
"€40,000,000,
(ii) each of 2 or more of the undertakings involved in the merger or acquisition carries on business in any part of the island of Ireland, and".
Amendment agreed to.
Amendment No. 59 not moved.
I move amendment No. 60:
In page 19, subsection (1), line 17, after "agreement", to insert ", announcement of the public bid or the acquisition of a controlling interest, whichever is the first to occur".
I appreciate there is merit in introducing an amendment to clarify the period within which to notify the acquisition of a controlling interest by means other than by formal merger agreement. To deal with this, I propose an additional provision, a section 3(2), which will expand the meaning of "agreement" for the purpose of the Bill to ensure the acquisition of a controlling interest by any means is notifiable within one month. In conjunction with my officials, I am having discussions with the draftsman, and we are considering whether this new provision addresses the issue sufficiently. If not, we may advance a further amendment on Report Stage.
Amendment, by leave, withdrawn.
Amendment No. 61 not moved.
I move amendment No. 62:
In page 19, between lines 30 and 31, to insert the following subsection:
"(4) Nothing in this section or any other provision of this Act prejudices the operation of Council Regulation (EEC) No. 4064/89 on the control of concentrations between undertakings.".
Amendment agreed to.
I move amendment No. 63:
In page 20, subsection (8)(a), line 7, to delete “€1,900” and substitute “€3,000”.
Amendment agreed to.
I move amendment No. 64:
In page 20, subsection (9)(a), line 17, to delete “€190” and substitute “€300”.
Amendment agreed to.
I move amendment No. 65:
In page 20, subsection (9)(a), line 17, to delete “€1,900” and substitute “€3,000”.
Amendment agreed to.
I move amendment No. 66:
In page 20, subsection (13), lines 42 and 43, to delete "Article 6.1 of".
Amendment agreed to.
Section 17, as amended, agreed to.
SECTION 18
I move amendment No. 67:
In page 21, subsection (1)(a), line 3, after “effect”, to insert “and the Minister has not by order prohibited the merger or acquisition in the public interest”.
This section concerns the limitations on when a merger or acquisition can come into effect, and I am adding the additional consideration that authorisation of a deal would have to await the Minister's decision, even if the Competition Authority had cleared it on competition grounds alone. Itis a fall-back provision, whereby the Ministercould still prohibit a merger on public interestgrounds.
I appreciate this raises a wider issue of the public interest, but it is an issue to which we should give some thought, even though we are pressed for time. A good place to start would be to draw the attention of the Minister to the words of her colleague, and my friend, Deputy O'Malley, who has an interest in this area. Deputy O'Malley, in a speech in the Dáil, said "I note from the Bill that the Minister gives over a lot of her powers to the Competition Authority, and I see why, but there should be some kind of residual reservation of powers to the Minister because, in the last resort, the Minister is responsible for competition policy and for the economic well-being of this country which is so dependent on competition policy and its enforcement. If I were the Minister, I would not give up all my powers. There is a reservation of some of the powers but she should consider perhaps more extensive reservation."
I agree with Deputy O'Malley. The residual reservation of powers to which he refers is probably in respect of media mergers, but he is right to argue that there is a public interest dimension and that it is not desirable that the Minister should give up all her powers in this regard. The Competition and Mergers Review Group does not recommend this either. We have had this discussion in other contexts about the diminution of the power of elected representatives, accountability and so on and for a variety of reasons, some of them good, parliament has handed over a considerable amount of its power.
If one cannot build a road through a farmer's field, at what stage, in the public interest, does one get tired and have to force through the road? If one cannot implement a network of halting sites for Travellers, how long does one tolerate the back-sliding of local authorities? There is a necessity sometimes to use State authority to get on with business. This is a big issue in a small country, and the size of the country has probably influenced the Minister in the sense that we all tend to know each other, and the political culture here is such that the nod and wink means the Minister of the day, whoever that may be, is malleable or assumed to be malleable, and is subject to representations and so on. Thus, activities are allowed to proceed that should have been prohibited because it is simply not acceptable within the political culture for the Minister to take a stand.
It is a draconian diminution of power to leave the Minister entirely outside the realm of the rubric of the media, with no power to intervene to prohibit a merger. I am not arguing for the Minister to be able to allow a merger the Competition Authority forbids. If the Competition Authority decides, on grounds of competition criteria, that a merger ought not be facilitated, then the Minister should not be able to overrule that. However, in the opposite set of circumstances, where the Competition Authority, which is after all required to examine cases only on the grounds of economic or competition criteria, decides that it is agreeable to a merger, then it is not in the public interest that the Minister should not have a role.
I have not had time today to think of examples of this, but it is not difficult to come up with examples of where we might regret that the Minister has been left without any power in this regard. If one has a highly motivated or ideologically driven Competition Authority which has a worked out theory on competition and states that on competition grounds it is permitting the merger, there may be strong public interest considerations that are not taken into account for the Minister to say "that is all very well but I am not permitting it for the following reasons". The requirement here is transparency. The Minister may be motivated by some of the things that have happened in the past in terms of these being looked at on the basis of a nod and a wink. If there was transparency in terms of the Competition Authority decision and the Minister's decision to overrule it and if the Minister was required to make available to the House, or whomsoever, the reasons for prohibiting the merger - that can be assessed on its merits - it would go a long way towards making better legislation.
This matter was referred to on Second Stage. While I do not have a copy of the Minister's reply, unless I am mistaken I understand there was a suggestion that the matter would be considered on Committee Stage. The Minister has retained onto herself, and her political successors, the right to determine the outcome of media mergers, yet in all other areas the matter is put under the sole and exclusive jurisdiction of the Competition Authority. There are times when there would be a public interest imperative on the Competition Authority to deal with such matters on strict competition grounds. In other jurisdictions there is, for example, a national security imperative that we might water down somewhat under the general remit of the public interest. Perhaps the Minister would examine this or is she determined to leave Bill in its original state? This is an important amendment.
I read Deputy O'Malley's contribution and I discussed the matter with him. I do not think I would be unfair to Deputy O'Malley to say his view on this matter might depend on who may hold the particular office. He would acknowledge that as a democrat. It is not being done for any of those reasons; it is being done for the following reasons. In the 24 years since we have had this regime, no single merger has been either restricted or refused on public interest criteria. There may be arguments, but if so they are weak, to prohibit something that is anti-competitive. I do not know how that can ever be in the public interest but occasionally lobby groups of one kind or another can have such sway and influence not only within the political system but with public opinion to almost convince some of the unconvinceable. Permitting something that is anti-competitive is not in the interests of consumers or the wider community. Equally, not to allow something that is good for competition is not in the interests of consumers or the wider community. At the end of the day competition is important. It is what improves the quality of services, delivers better value for money and increases choice for consumers. That being the principle of what is being debated, it is appropriate that the body that has the expertise should examine these matters and in a compassionate and objective way make the decisions based on competition criteria. I would equate it to the planning process where, equally, the removal of political influence from the process in the 1970s has been generally good. That is not to say I like all the decisions of the independent board.
That the review group did not recommend this is true. The company that looked at company law enforcement recommended that the Minister hold the power to initiate company law inquiries. For the same reason I removed that power from the Minister, if there are laws and powers to hold inquiries, they should be initiated and conducted purely on the criteria set out in the legislation. In the case of inquiries where there are reasons to believe the law has been abused, where there are allegations that would lead to that conclusion, they should be conducted in a dispassionate way and it should not be a political decision as to whether they happen. Equally that is the case here.
As the committee is aware, we are retaining the power in relation to media mergers. I shall have something to say about that matter later. No part of the Bill has taken up more time in terms of consultation and discussion than the matters relating to the media. It is difficult to arrive at the ideal solution but there are separate public interest grounds that apply to media mergers that do not apply to mergers generally. Criteria have been written into the Bill that must be considered in relation to mergers in the media area but that does not apply to these matters. For that reason and given that for 24 years nothing has been restricted or refused on public interest criteria, there is no merit in retaining the power at political level.
We are ad idem on the question of the undesirability of permitting something that is anti-competitive. I do not think there is any problem in that regard. There is some merit in the amendment in so far as it is constructed in a fashion that it permits a fall-back position where the opposite could happen. In other words, the Minister could prohibit a merger on public interest grounds even if it had been cleared by the authority. Earlier the Minister dealt with an aspect of the Bill that imposes significant duties and obligations on international companies almost solely because of the type of Coillte case that she mentioned, which goes to show a minor aberration can occur. We will see the day when the House will regret that the Minister of the day will not have this residual power. As the Minister said, it would be used very infrequently. It is difficult to envisage in terms of this amendment how it could be used mischievously or for any nefarious purpose. I can understand how there might be political collusion in facilitating a merger or a takeover. I do not know what Deputy O'Malley thinks in private but I think, in private, it has happened in this country. I am not sure how political probity could come into question in forbidding a merger once there is a requirement to make clear, publicly, and to state in the House the reasons that would not happen. We are making a big decision here. Once the power is gone, it is gone and I presume with it goes the Minister's flexibility.
As I understand it, and I am open to correction on this, when a finding comes back from the Competition Authority, there is nothing to prevent the Minister sitting down with the parties and negotiating or extracting certain conditions to attach to approving the merger. That appears to be a valuable flexibility in the Irish context. I recall the Tesco case - I do not know what the Minister will say about the efficacy of the decision made - when certain assurances were extracted in terms of suppliers, etc. It is not difficult to foresee circumstances where there would be flexibility to sit down with the parties and attach conditions. The Minister referred to planning and An Bord Pleanála but An Bord Pleanála frequently attaches conditions to the granting of a planning permission and it might be useful for the Minister to retain that flexibility here. I understand that if this measure goes through, if the Minister is minded to so do, that flexibility goes with it. Handing over all her powers is a step too far.
The Deputy has put a strong case. Perhaps we should hear the Minister.
The authority can lay down the conditions. I have shown throughout Committee Stage, both in the Seanad and here, a willingness to accept amendments because I want to ensure we have the best possible legislation. If somebody can give me a good example of where it might apply, I would be disposed to coming back to it on Report Stage but having the power to stop something that is approved can be equally a bad thing. Deputy Rabbitte suggests that it should not be a power to make something happen, that that is anti-competitive, but stopping something that is good for competition can have a detrimental effect. It is not good enough to say that because the power is negative, that is some class of a safeguard. In any event, if somebody can give me a good example, and we have not had one for 24 years, of where some public interest or other criteria could arise from time to time that should give the Minister this residual power, I am open to coming back to this on Report Stage. Perhaps between now and then Deputies could apply their minds to that.
We want to avoid circumstances in which everything must go to the Minister and to the authority. No one would want that and where the Minister has a residual power, that is what we would end up doing.
Deputy Rabbitte indicated at the outset that he had not got examples to give in this regard.
The Minister seeks examples. If, for example, the abbey national bank of Cork, if such an institution existed, proposed to merge with a Taliban bank in Kabul, the proposal would have to be cleared by the Competition Authority on competition grounds but in circumstances where the Minister had not reserved power onto herself, one could argue that such a merger would not be in the public interest having regard to the activities of such a Taliban bank.
The Deputy has given an example but I do not know if the Minister wants to accept it now or give a commitment with regard to——
I am aware of the example the Deputy put forward but the Central Bank decides who should get a licence to carry on banking activity in the country. The fitness of people to operate a bank is not a matter for me or the authority.
Under the new regime, mergers between banks is a matter for the authority.
If the threshold is high enough, for example, in a Bank of Ireland-AIB scenario, which has been in the public domain in recent times. Given the thresholds involved, that would be a matter for the European Union.
By way of clarification, a leader article in The Irish Times recently made reference to this matter, which I presume referred to the existing situation, but I thought prospective banking mergers under the new Bill, presuming thresholds, could go to the Competition Authority. Is that not correct?
If it is over our threshold and below the EU threshold, but we would be talking about relatively small banks, and then there is the 20% rule. If it is over 20% of banking, the Minister for Finance has a role in it, so the merger of financial institutions involves a number of players, but if the Deputy is talking about two large players, he is talking about a European Union-wide function.
If we are in the position to which Deputy Flanagan referred, and the threshold is low, it is a matter for——
To carry on banking activity here an institution must be licensed by the Central Bank and, shortly, by the new regulator. If it was below the threshold, it would be a matter for the Competition Authority.
Perhaps Deputy Flanagan's point would then come into play. In light of what the Minister said, could we agree to come back to this matter on Report Stage? That would give us all an opportunity to consider it further.
It would not be a bad thing if two small banks merged and helped to create more competition.
While the example given by Deputy Flanagan may be in the interests of competition, it may not be in the interest of public good.
Bringing banks together? Let us be frank. There is no question that mergers sometimes lead to job losses or a reduction of services in a particular region. That is the economic effect of some mergers. The consequences of not doing it could be that everything goes under, for example, in the food sector where we have seen some mergers and job losses. If those mergers did not take place, we would not have companies on a scale to be able to compete internationally. We are operating in a market of less than four million people and according to a recent article I read, we are the most globalised nation in the world. We have to export more than 80% of what we produce. There is no point in being a small efficient player in Ireland if we cannot survive in the medium to long-term because we cannot get the kind of scale that is necessary. These are difficult issues but competition criteria and economic consequences are not always in the interests of having a huge level of service.
I have tried to argue that this would be a fall-back and exceptional circumstance, and it is a question of retaining the power. It is not stated in the Bill, as I read it - perhaps I am wrong - that the Competition Authority takes into account public interest considerations. The Competition Authority takes into account only competition criteria.
If we can come up with a good example of the authority having all the power we are giving it but, in exceptional circumstances, a Minister having a power, notwithstanding the authority's decision, I am open to considering this matter again on Report Stage.
I do not want to constrain the powers of the authority nor do I want to put work on the Minister's desk, but I am curious to know why we alone in the OECD are in this position. As I understand it, Norway and Iceland are the only two countries in the entire OECD where there is not a residual public interest power retained by the Minister.
To be honest, I did not examine it in the context of what happens elsewhere.
My understanding is that throughout the OECD, the Minister has the residual power.
In the interests of moving forward and in light of what the Minister has said——
I am advised by my very efficient public servant that the EU - we often hear how wonderful everything is in the EU and how awful it is elsewhere, although I am a strong fan of EU membership - does not apply any of these public interest criteria either. I am not being flippant. I realise people are being serious, as I am. We will decide on Report Stage whether we can give further consideration to the points being made. I am reluctant to give away powers. An important role performed in a democracy is the role of scrutiny by Members of the Oireachtas and as we assign more and more activities to operationally independent bodies, that is sometimes confused with the accountability and scrutiny role the Oireachtas should have. That would not be a good thing.
Deputy Rabbitte will recall events in the past when it was assumed individuals wanted to do something that was in, what was then called, the national interest, but I am not certain the national interest and the public interest are the same for this argument. However, if public interest criteria should apply in exceptional circumstances and if we can come up with a meaningful way in which these criteria should apply, notwithstanding that they did not apply for 24 years, I am willing to do something on Report Stage.
How stands the amendment?
I will consider my position for Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 68:
In page 21, subsection (1)(c), line 7, to delete “has” and substitute “have”.
This is purely a technical amendment.
Amendment agreed to.
Amendment No. 71 is related to amendment No. 69 and they may be taken together by agreement.
I move amendment No. 69:
In page 21, subsection (1)(c), line 9, after “acquisition” to insert “providing that a proposed merger would be deemed to be approved if the Authority fails to inform the parties of its determination under section 20 within the 1 month period as specified under section 20”.
I will withdraw amendment No. 71 which appears to conflict with amendment No. 69. Deputy Perry and I appear to have got our wires crossed on this. On the matter of the tacit approval of mergers, this amendment seeks to clarify the position on informing the parties.
I am disposed to accepting this amendment. I will return to this matter on Report Stage.
Is the Minister accepting the amendment?
I will come back on Report Stage with perhaps a different wording. This matter is being considered by the parliamentary counsel and I am disposed to accepting the principle of this amendment.
So the amendment is accepted?
No, I accept the principle of it and I will come back with an amendment on Report Stage.
Amendment, by leave, withdrawn.
Amendments Nos. 70 and 71 not moved.
Amendment No. 73 is consequential on amendment No. 72 and they may be taken together by agreement.
I move amendment No. 72:
In page 21, subsection (5)(b), line 29, after “made”, to insert “, within 1 month from the date of receipt by it of the notification of the merger or acquisition concerned under section 17,”.
Concerns were expressed in the debate in the Seanad and on Second Stage that the provisions of section 18(5) could allow the Competition Authority to extend indefinitely the period for a first phase examination of a notified merger. This certainly was not intended. Accordingly, I propose this amendment to ensure that any request for additional information made by the authority during a first phase examination must be made within a one month timeframe from the date of receipt of the notification.
Amendment No. 73 is a technical amendment consequent on amendment No. 72. If that is accepted, the phrase "date of notification" will occur in paragraph (b) of section 18(5) as well as in paragraph (a).
Amendment agreed to.
I move amendment No. 73:
In page 22, subsection (7), line 7, to delete "paragraph (a) of”.
Amendment agreed to.
I move amendment No. 74:
In page 22, between lines 13 and 14, to insert the following subsection:
"(8) Subsection (7) is without prejudice to section 17(14).”.
This is a minor technical amendment which removes any ambiguity regarding the timetable within which the authority must examine and make a decision on a notified merger. In particular, the amendment provides certainty in regard to interaction between national and EU merger control timetables where this is needed, for example, where the Commission decides to refer a case to a national authority for the application of that State's national law.
Amendment agreed to.
Section 18, as amended, agreed to.
SECTION 19.
I move amendment No. 75:
In page 22, subsection (1)(a), lines 15 to 18, to delete all words from and including “, unless” in line 15, down to and including “paragraph” in line 18.
In this amendment I pursue the concept of a secret merger where matters could be concluded in such a way as not to involve any overt notification. Consideration should be given to ensuring the examination by the authority is done in a way that people are aware of what is happening.
We know from experience over the years that occasionally it can be necessary to deal quickly with a merger proposal. The purpose of the provision which the amendment seeks to delete is to ensure that in such circumstances the authority is not prevented from dealing with such cases expeditiously by procedural requirements. In view of some comments made concerning this provision, I should make certain matters clear. First, if such a case were to arise, it is true that third parties would not have the opportunity to comment on the merger. However, under the current regime, third party views are not canvassed at all in the first phase examination. In the proposed regime, it would be only in the most exceptional circumstances that third parties would not have the opportunity to comment. In such cases, the public interest in dealing with the matter expeditiously would outweigh any benefits that might attach to public consultation. It would be for the authority to decide whether it is in the public interest to activate this provision. Second, all other provisions would apply. The authority would have to give a reasoned decision which would be open to subsequent public scrutiny. The decision on the merger would remain with the authority which would have to apply the normal criteria. In other words, a merger would be cleared in such circumstances only if the authority were satisfied that it would not substantially lessen competition in markets for goods or services. In the circumstances, it is a reasonable provision and I cannot accept the amendment.
I would have thought there was an argument in favour of openness. We discussed earlier that public interest criteria will not be available nor will any power be reserved by the Minister. Having decided that, a situation could arise where the authority could act in secret and behind closed doors without reference to openness, until after the event, which I am not sure would be in the public interest.
The way I envisage this provision being used is where, for example, a financial institution might be about to go under with major consequences for many other people. The authority would have to be satisfied that such a merger would not lessen competition - it would not be an automatic approval - and for the reasons given it would not have to go through the timeframe that is generally specified. This is an exceptional measure to deal with exceptional circumstances.
Amendment, by leave, withdrawn.
Section 19 agreed to.
SECTION 20.
I move amendment No. 76:
In page 23, between lines 22 and 23, to insert the following subsection:
"(5) The parties to a transaction that is required to be notified to the Authority under this Act may request the Authority to commence its consideration of the transaction as an investigation under section 21 and where such a request is made the parties shall, subject to the provisions of this Act, be informed of the Authority’s determination of the matter within 3 months from the appropriate date.”.
This is a technical amendment related to notification. The Minister might accept it.
Acceptance of the amendment would constrain the authority by reducing the timescale for a full second phase investigation at the discretion of the parties. Such phase two investigations are rare. Where they are necessary I believe the authority should be given the maximum time available to fully investigate and decide on the merger. The parties might be the ones to suffer if the authority is forced to take shortcuts in the analysis.
Amendment, by leave, withdrawn.
Section 20 agreed to.
SECTION 21.
Amendments Nos. 78, 79 and 81 are consequential on amendment No. 77 and amendment No. 82 is related to amendment No. 77. Therefore, amendments Nos. 77 to 79, inclusive, and 81 and 82 may be taken together by agreement.
I move amendment No. 77:
In page 23, subsection (4), line 43, to delete "shall-" and substitute "shall reduce the determination to writing (and the determination in that form is referred to in paragraph (a) and subsection (7) as a ’written determination’) and-”.
These are technical amendments introduced to clarify that the authority must produce a written determination following a full or second phase investigation. This is particularly important as it on the basis of the written determination that the parties will decide whether to launch an appeal to the High Court.
Amendment agreed to.
I move amendment No. 78:
In page 23, subsection (4)(a), line 44, to delete “inform” and substitute “furnish to”.
Amendment agreed to.
I move amendment No. 79:
In page 23, subsection (4)(a), lines 44 and 45, to delete “of that determination” and substitute “a copy of the written determination”.
Amendment agreed to.
I move amendment No. 80:
In page 24, subsection (4)(b), line 2, to delete “2 months” and substitute “1 month”.
Amendment agreed to.
I move amendment No. 81:
In page 24, subsection (7), line 11, before "determination" to insert "written".
Amendment agreed to.
I move amendment No. 82:
In page 24, subsection (7), line 12, after "making", to insert "and shall include a report in relation to the full investigation".
Amendment agreed to.
Section 21, as amended, agreed to.
SECTION 22.
I move amendment No. 83:
In page 24, subsection (4), line 35, after "under", to insert "paragraph (a) or (c) of subsection (3) of”.
There has been much discussion on my role as Minister in the determination of media mergers. On the one hand, there is the position whereby media mergers are treated in the same way as any other merger. On the other hand, there is a present subsection (4) which gives the Minister the power, inter alia, to overturn a determination of the Competition Authority following a full investigation of a merger. This goes too far. I have decided that my powers under section 22 will only come into play in circumstances where the Competition Authority, following a full investigation, determines that the merger can be put into effect or that it can be put into effect subject to conditions. The Competition Authority’s assessment under section 21 will be made on competition grounds. Many of the relevant criteria are competition orientated, albeit competition criteria specially designed for the media sector.
I also recognise that most media mergers will not give rise to public interest concerns and these, in practice, will be determined by the authority. Those which are prohibited will be prohibited under competition grounds and I am satisfied that the authority's determination, under section 21(3)(b), to prohibit a merger will be sufficient to act as the final determinant for a media merger. This takes on board what Deputy Rabbitte suggested in relation to media mergers generally. The Minister’s powers are restricted.
We are restricting the Minister's powers?
A Minister does not have the power to permit something that is anti-competitive but the Minister has the right, notwithstanding the fact that the authority might approve a merger, on public interest grounds to make a different decision.
So it is the format I proposed earlier.
Yes.
The Deputy is bound to agree with it.
That does not follow. One of our more eminent journalists has described this public interest argument as a portmanteau. I am not sure what that means but I think it is slightly derogatory.
I understand it is a suitcase.
Mr. Whitaker has written about this portmaneau which would imply, and he may or may not agree with the Minister, that he does not think much of the public interest argument in practice.
Mr. Whitaker is in the environs of the building. He has pure instincts on these matters.
That is a fair description.
He is as pure as they get, in my experience.
That is a fair description and I am sure he would not object to it. The Minister retains power in respect of media mergers but only the power to prohibit a merger that the authority has approved on economic or competition criteria. The Minister could not intervene to allow a merger?
No. The Minister could intervene to stop a merger that is otherwise approved. In other words, if the Competition Authority determined that it was anti-competitive, the Minister has no power to overrule it. However, if the Competition Authority decided to approve it on competition grounds, the Minister has the power, under the wider criteria relating to media mergers, such as diversity and so forth, to say: "I do not agree; it is good for competition, perhaps, but not for plurality of ownership and so forth". It is a power that can only be exercised in restrictive circumstances. Clearly, it cannot be exercised if the matter was going to be anti-competitive.
It would not arise if it was going to be anti-competitive.
No. Let us say the Competition Authority refuses to approve a media merger because it is bad for competition. The Minister has no power to approve it.
The Minister cannot force it through.
However, if the Competition Authority approved something on the grounds that it is good for competition, the Minister has the power to agree that it might be good for competition but to refuse approval on other criteria which we describe as public interest criteria, for want of a better description. There are criteria in the legislation which have to be taken into account for media mergers. The commission on the newspaper industry recommended them. Using some of those criteria, the Minister can determine that a merger cannot happen.
That is notwithstanding the Minister's argument about the difficulty of defining public interest criteria.
We are including in the Bill specific additional criteria relating solely to media mergers because of the impact the media have in a democracy and the importance of diversity of opinion, plurality of ownership and the other matters we have discussed previously.
Subject to an opportunity to reflect on this before Report Stage, I am prepared to acknowledge that this further restriction might not make any difference to our objectives in this area. I would like to consider the amendment and what its implications will be. I am not withdrawing amendment No. 84. If there were more Deputies available, I would call a vote on it.
Amendment agreed to.
I move amendment No. 84:
In page 24, after line 44, to insert the following subsection:
"(5) The Minister shall prohibit a merger or acquisition if the effect thereof is to enable an entity with an interest in more than 20 per cent of a particular media market to obtain an interest in more than 20 per cent of another media market.".
The amendment speaks for itself. It is an attempt to insert a new subsection that would give the Minister the power to prohibit a merger or acquisition if the effect thereof is to enable an entity with an interest in more than 20% of a particular media market to obtain an interest in more than 20% of another media market. I attempt in amendment No. 87 to define "media market".
The amendment strengthens the merely discretionary provisions of the Bill. It will prohibit media cross-ownership where a particular entity has greater than a 20% interest in a number of markets, for example, newspapers, television and so forth. Regardless of whether we like it, we live in an era of cross-media ownership with all the implications it has for diversity, information, education, entertainment and so forth. It is especially important in terms of the political life of the country, for reasons there is no need to expound. Without a threshold being stipulated, the Bill is toothless in this regard.
My trusty researcher drew my attention to the Financial Times today which has a full page report that the UK Government, which is currently considering the future regulatory arrangements for broadcasting and media, is likely to retain the present ban on cross-ownership of TV and radio companies by press companies, notwithstanding the allegations that the current British Government is close to Mr. Murdoch or has become close to Mr. Murdoch. I do not know if the threshold should be 15%, 20% or 25% but if we do not specify a threshold, we cannot say we are being serious about this area. In an era when convergence of technologies is producing new media, we have to be careful. If we have been negligent or asleep on the job in facilitating monopoly or undue dominant positions in the old media, it would be neglectful and unforgivable to facilitate it in the new media.
The issue of media mergers probably consumed a greater part of the consultation process than any other provision of the Bill. I broadly support what Deputy Rabbitte is seeking to achieve. However, I am not certain that what he suggests will do that. In fact, it might restrict competition.
The amendment raises the issue of how best to control the level of concentration of ownership and control in the Irish media sector. Many people, including myself, are uneasy about the concentration which exists at present. There are two general approaches available and we have to choose between them. One is the approach suggested by these amendments to fix a limit on the maximum interest which any undertaking could have in a media market. The alternative approach is to decide each individual media merger as it arises, bearing in mind the wider picture and what we are trying to bring about or achieve for the sector as a whole. There are formidable difficulties in the way of the first approach, not least the difficulties of defining in law the markets concerned and what figure at which to set the ceiling. The second approach permits and requires the exercise of judgment by the appropriate authorities, particularly the Competition Authority, and exceptionally the Minister and the Houses of the Oireachtas in every individual notifiable media merger. This approach is consistent with having in mind broader market share considerations which may guide the individual decisions. That is the way to do it.
We are aware of the huge concentration in the Irish media sector. To allow someone to effectively compete with that, we may want to allow him or her to get more than 20% of a particular market. I am not advancing the case for any particular company, but for the purpose of the argument it may be good to allow the Crosby Holdings Group to grow to more than 20% of the market to be able to compete with a dominant player in the market.
It is difficult to define the market. We have had many discussions on this issue. There is a tabloid market and a non-tabloid market. There is a weekly market and a Sunday market. When one starts to define and examine such issues, it is a minefield. Deputy Rabbitte specified five sectors in his amendment - television, radio, broadcasting services platforms, national newspapers and magazines and provincial and local newspapers and magazines. Deputy Rabbitte referred to an entity with an interest in more than 20% of a particular media market which obtains an interest in more than 20% of another media market. If someone has 21% of the provincial newspaper market, should he or she be given the right to have 30% or 40% of the national media market? Should it be decided on a case by case basis? Sometimes we may need to allow someone to grow more. It is the problem of 20%. I know the Deputy said he is not hung up about that and perhaps we could increase it. I would love to accept the amendment or something along those lines, if it would work. However, it is difficult to see how we could achieve the type of outcome Deputy Rabbitte suggests other than by examining matters on a case by case basis.
I do not deny its complexity. I do not easily see a rival power emerging in the Irish context. It is more likely that there will be further aggregation. I have attempted to define the media market, but it is difficult to do that. It is probably bad to be hidebound by the position as it stands at present rather than looking at it in legislative and theoretical terms. Without some attempt to stipulate a threshold, further aggregation will proceed apace and we will always find some argument to permit that. That has been and continues to be my fear. I will reflect on what the Minister said and retain my options for Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 85:
In page 25, subsection (9)(a), line 21, to delete “given” and substitute “made”.
This is a technical amendment made in the interests of clarity.
Amendment agreed to.
I move amendment No. 86:
In page 25, subsection (10)(a), line 38, to delete “or magazines” and substitute “or periodicals consisting substantially of news and comment on current affairs”.
This amendment clarifies the type of publications covered under category A of the definition of media business. As currently drafted, the definition covers every type of newspaper and magazine, regardless of the subject matter. That is too wide a scope for the printed word. I have, therefore, adapted the definition of newspaper in the Mergers, Takeovers and Monopolies of Newspapers Order, 1979, and restricted the definition to newspapers and magazines which consist of news and comment on current affairs. This definition is virtually the same as that in the newspapers order which has worked effectively for the past 20 years.
Amendment agreed to.
Amendment No. 87 not moved.
Amendments Nos. 88 and 89 are related and both may be discussed together.
I move amendment No. 88:
In page 26, subsection (12), lines 33 and 34, to delete "or a satellite device" and substitute ", a satellite device or any other transmission system".
The Minister might consider the amendment on the basis of technological advancement.
I would prefer to come back to it on Report Stage.
Amendment, by leave, withdrawn.
Amendment No. 89 not moved.
Section 22, as amended, agreed to.
SECTION 23.
Amendments Nos. 90 and 91 are related and both may be discussed together.
I move amendment No. 90:
In page 26, subsection (3)(a), line 45, to delete “involved in” and substitute “which made the notification in relation to”.
The use of the phrase "parties involved" is too broad as it is possible that, for example, third parties who made submissions to the authority could be deemed to be parties involved. Accordingly, I propose to clarify that only the parties which notify the merger can initiate an appeal. However, I am opposed to extending the right of appeal against a merger decision to a wider range of parties as that would result in an unnecessary prolonging of the process. There are provisions in the Bill to allow interested parties not directly connected to the merger to make known their views to the Competition Authority.
That might be the case but there is no corresponding obligation on the part of the authority to respond to the submission which a non-associated or non-involved party might make. The categories of persons entitled to bring an appeal under the legislation as drafted are too narrow. Consideration should therefore be given to involving other parties. I accept that "any aggrieved person" in my amendment is probably too broad as that would be open to a wide interpretation. However, some consideration should be given to categories of persons other than those directly involved, such as competitors, suppliers, customers and those in some form of association who, under the current legislation, do not appear to have any rights. There is a strong consumer remit in similar legislation in other jurisdictions. However, that does not appear to have been included in this legislation. I thought an important aspect of the legislation would be the enhanced position of a consumer group, such as the Consumers' Association of Ireland, which would act as a watchdog for its members. I accept that the phrase, "any aggrieved person", in amendment No. 91 is too broad. I ask the Minister to consider the points I have made. This would broaden somewhat the group of persons currently entitled to bring a High Court appeal.
Under section 19(1)(a) the authority is obliged to consider all submissions made, whether in writing or orally, by the undertakings involved in the merger or acquisition, or by any individual or any other undertaking. There is, therefore, an obligation on the authority to give full consideration to the points made.
Amendment agreed to.
Amendment No. 91 not moved.
As amendment No. 93 is an alternative to amendment No. 92, both may be discussed together.
I move amendment No. 92:
In page 27, subsection (5), to delete lines 16 to 27 and substitute "the testimony of one or more witnesses if it considers it was unreasonable for the Authority to have accepted or found as a fact any matter concerned.".
Deputy Flanagan's amendment is encompassed by mine to leave both paragraphs (b) and (c).
Amendment agreed to.
Amendment No. 93 not moved.
Section 23, as amended, agreed to.
Section 24 agreed to.
SECTION 25.
I move amendment No. 94:
In page 28, subsection (4)(a), line 30, to delete “€1,900” and substitute “€3,000”.
Amendment agreed to.
I move amendment No. 95:
In page 29, subsection (7)(a), line 8, to delete “€190” and substitute “€300”.
Amendment agreed to.
I move amendment No. 96:
In page 29, subsection (7)(a), line 8, to delete “€1,900” and substitute “€3,000”.
Amendment agreed to.
Section 25, as amended, agreed to.
NEW SECTION.
I move amendment No. 97:
In page 29, before section 26, to insert the following new section:
"26.-(1) The Minister may make an order once, and once only, in each year, beginning with the year following the year in which this section is commenced, amending subsection (1)(a) of section 17 by substituting for the monetary amount standing specified in subparagraph (i) or (ii) of that provision for the time being a monetary amount that is greater than that amount.
(2) In making an order under subsection (1), the Minister shall have regard to, and only to, such economic data as the Minister considers to be relevant to the purpose.
(3) Every order under this section shall have effect on and from the date on which it is made and shall be laid before each House of the Oireachtas as soon as may be after it is made; if a resolution confirming the order is not passed by each such House within the next 21 days after that House has sat after the order is laid before it, the order shall lapse, but without prejudice to the validity of anything previously done thereunder.".
This amendment simply allows the Minister to increase the turnover threshold for which parties are required to notify a merger or acquisition.
Is this by way of regulation?
Yes.
I am sorry. I have not read this.
It is just repeating what is contained in the current Act.
Yes. Agreed.
Amendment agreed to.
Sections 26 and 27 agreed to.
SECTION 28.
I move amendment No. 98:
In page 30, subsection (1)(a), line 4, before “to” to insert “to enforce the Competition Act and Articles 81 and 82 of the Treaty and”.
This is a minor amendment. Somebody brought to my attention the fact that it may be useful to stitch a reference to the treaty into section 28. This does not appear to have been encompassed in the functions of the authority. It may be a main function of the Bill, but as section 28 outlines the functions of the authority, reference should be made to Articles 81 and 82.
The Deputy's amendment would duplicate what is already set out in section 13(2) which reads, "The authority shall have a right of action under this subsection in respect of an agreement, decision or concerted practice or an abuse which is prohibited under sections 4 or 5, or by articles 81 or 82."
Therefore, the point being made by the Deputy is covered.
There is a difference between a right and a function, but I will not argue the point.
I am sorry. Is the Deputy asking a question?
The Minister said that as the authority has a right under section 13(2), there is no need to refer explicitly to it in section 28. I responded that there is a difference between a right and a function, but if the Minister is happy, that is all right.
To accept this amendment would duplicate what is contained in section 13(2).
All right.
Amendment, by leave, withdrawn.
As amendment No. 102 is cognate on amendment No. 99, both may be discussed together.
I move amendment No. 99:
In page 30, subsection (1)(a), line 6, after “services”, to insert “or any other matter relating to competition”.
An important aim of the Bill is to enhance the advocacy role of the Competition Authority. However, I consider that the wording of section 28(1)(a), which is taken directly from the 1991 Act, is limited and, therefore, out of step with such a goal. The authority has faced criticism in the past that it may have exceeded its statutory function in conducting certain studies. For example, it could be alleged that an examination of the state of competition in a particular market is different from the methods and practices and, therefore, not within the terms of the section. I favour the broadest possible remit for the authority when carrying out studies. Accordingly, I am introducing amendment No. 99 to give a wide mandate to the authority to consider any aspect of competition. Amendment No. 102 is consequential.
Amendment agreed to.
I move amendment No. 100:
In page 30, subsection (1), lines 25 and 26, to delete paragraph (g) and substitute the following:
"(g) to carry on such activities as it considers appropriate, to liaise and consult with the public, public representatives and representatives of business, farming community, trade unions and consumers about issues concerning competition and the performance of its functions under this Act.”.
This amendment seeks to give statutory effect to aspects of the functions of the authority that I deem to be of some importance. The Minister just mentioned the authority's broad remit. This amendment seeks to give it further statutory effect.
I consider that the points encompassed by the amendment are already covered by subsection (1)(a), (b) and (g).
Amendment, by leave, withdrawn.
I move amendment No. 101:
In page 30, between lines 26 and 27, to insert the following subsection:
"(2) In cases where a complaint has been received and has been investigated by the Authority there shall be an obligation on the Authority to publish a response to the complaint within a period of 90 days of same having been received.".
This amendment seeks to place an obligation on the authority to publish a response within a reasonable timeframe. Giving statutory effect to such a period of time would be warranted. I ask that the amendment be looked upon favourably.
I will try to look upon it favourably, but a rigid time limit would greatly restrict the work of the authority. As investigations vary greatly, the imposition of a strict deadline could seriously impede the successful completion of an investigation. I am anxious that the authority deals with complaints expeditiously, but the proposed amendment would place inappropriate constraints on it. Unfortunately, therefore, I am not in a position to accept it.
Amendment, by leave, withdrawn.
I move amendment No. 102:
In page 30, subsection (2), line 29, after "services", to insert "or any other matter relating to competition".
Amendment agreed to.
Section 28, as amended, agreed to.
SECTION 29.
I move amendment No. 103:
In page 31, subsection (4), line 25, to delete "€1,900" and substitute "€3,000".
Amendment agreed to.
Section 29, as amended, agreed to.
SECTION 30.
I move amendment No. 104:
In page 31, subsection (2)(a), to delete line 37 and substitute the following:
"in the performance of any of his or her functions under this Act, being a communication the making of which was necessary for the performance by the member or officer of any such function,".
This amendment clarifies that one of the exceptions on the disclosure of information is related only to the functions arising under the Competition Act.
Amendment agreed to.
I move amendment No. 105:
In page 31, subsection (2)(b), line 42, to delete “court.” and substitute the following:
"court, or
(c) the disclosure by a member of the Authority, a member of staff of the Authority or an authorised officer to any member of the Garda Síochána of information which, in the opinion of the member or member of staff of the Authority or authorised officer, may relate to the commission of an offence (whether an offence under this Act or not).”.
Section 30 relates to the prohibition on the disclosure of information. This amendment is necessary to ensure information that may relate to the commission of an offence is passed on to the Garda Síochána.
Amendment agreed to.
I move amendment No. 106:
In page 31, subsection (3), line 45, to delete "€1,900" and substitute "€3,000".
Amendment agreed to.
As amendment No. 108 is consequential on amendment No. 107, both may be discussed together.
I move amendment No. 107:
In page 32, subsection (4), line 3, to delete "who has contravened that subsection" and substitute "referred to in subsection (5)”.
Section 30 prohibits disclosure by a member of the authority or a member of staff of the authority and provides for remedies where this prohibition is breached, of which one is that it is possible for the person who has suffered as a result of the disclosure to sue for damages. However, I see no good reason to personally expose a member of the authority or a member of its staff to an action for damages. The fact that an unauthorised disclosure can also be a criminal offence seems a sufficient deterrent. Accordingly, I am proposing these amendments to provide that any action for damages will be against the corporate body of the authority.
Amendment agreed to.
I move amendment No. 108:
In page 32, between lines 7 and 8, to insert the following subsection:
"(5) The person mentioned in subsection (4) is-
(a) if the person who contravened subsection (1) is other than a member or a member of staff of the Authority or an authorised officer, that person,
(b) if the person who contravened subsection (1) is a member or a member of staff of the Authority or an authorised officer and the relief sought, or to the extent that the relief sought, in the proceedings is-
(i) relief referred to in subsection (4)(a), that person,
(ii) relief referred to in subsection (4)(b), the Authority.”.
Amendment agreed to.
Section 30, as amended, agreed to.
Sections 31 and 32 agreed to.
SECTION 33.
As amendment No. 111 is consequential on amendment No. 109, both may be discussed together.
I move amendment No. 109:
In page 34, between lines 44 and 45, to insert the following subsections:
"(2) Without prejudice to subsection (1)(b), where it appears to the Minister that the chairperson of the Authority is temporarily unable to discharge his or her duties, the Minister may authorise another whole-time member to act, for all or part of that period of inability, in the chairp erson’s place and for so long as such a member is so authorised references in this Act to the chairperson of the Authority shall be construed as including references to that member.
(3) Subject to subsection (4), sections 15 and 17 of the Civil Service Commissioners Act, 1956, shall apply, with any necessary modifications, in relation to appointments of members of the Authority as they apply in relation to appointments to positions in the civil service and, accordingly, the Minister shall not appoint a person to be such a member unless the Civil Service Commissioners, after holding a competition under that section 15, have, under that section 17, selected the person for appointment and advised the Minister accordingly.
(4) Subsection (3) does not apply to an appointment under paragraph (b) or (c) of subsection (1) or the re-appointment under that subsection of a person as a member of the Authority (including a person who was such a member immediately before the commencement of this section).”.
I am proposing a new subsection (2) as authorising another whole-time member to act while the chairperson is unable to discharge his or her duties is not covered by the existing text. Subsection (3) arises from discussions in the Seanad and I am happy to propose it now. It will increase the independence of the authority by giving it the function for the initial and selection stages of the appointment of members to the Civil Service Commission.
That must be welcomed and we thank the Minister for taking those on board.
Amendment agreed to.
I move amendment No. 110:
In page 34, subsection (2), to delete lines 45 and 46 and substitute the following:
"(5) An appointment under paragraph (b) or (c) of subsection (1) shall not be made unless the proposed appointee possesses, in the opinion of the Minister, sufficient”.
This amendment provides that the Minister will only appoint temporary or part-time members who possess the relevant expertise. The Civil Service Commission recruitment process will ensure that full-time members are qualified.
Again, that is a welcome amendment.
It could be interpreted very broadly but I accept it.
Amendment agreed to.
I move amendment No. 111:
In page 35, subsection (7), line 12, to delete "The" and substitute "Subject to subsection (3), the”.
Amendment agreed to.
Section 33, as amended, agreed to.
Sections 34 and 35 agreed to.
SECTION 36.
Amendment No. 116 is an alternative to amendment No. 112. Amendments Nos. 112 and 116 to be taken together by agreement.
I move amendment No. 112:
In page 37, between lines 2 and 3, to insert the following subsection:
"(4) The chairperson of the Authority shall, whenever required to do so by-
(a) a committee appointed by either House of the Oireachtas, the business of which committee includes examination of policy relating to competition, or
(b) a committee appointed jointly by both Houses of the Oireachtas, the business of which committee includes examination of such policy,
attend before such committee to discuss the general activities of the Authority.".
The original proposal for this amendment arose in the Seanad and I am happy to accommodate it. This new subsection will give the relevant committee of the Oireachtas the opportunity to make a valuable input into thinking in regard to competition policy and will give members of those committees an opportunity to discuss matters relating to competition in detail with the chairperson.
That is welcome. Again, we thank the Minister for taking that on board.
Amendment agreed to.
I move amendment No. 113:
In page 38, subsection (1), line 15, to delete "4 months" and substitute "2 months".
This amendment arises from the debate in the Seanad. It is not unreasonable that the authority should be able to produce its annual report within two months of the end of the year, hence this amendment.
Amendment agreed to.
Amendment No. 115 is consequential on amendment No. 114. Amendments Nos. 114 and 115 may be taken together by agreement.
I move amendment No. 114:
In page 38, subsection (1), line 16, to delete "make a report to the Minister" and substitute "publish a report".
In future the time limit for publishing the annual report will be short-circuited. The authority will publish it itself in line with its more independent status and this will mean that it is available in a shorter period after the end of the preceding year. The authority publishing it itself will assist in achieving this efficiency. Up to now, it was submitted to the Minister, brought to the Government and so on for publication which is inconsistent with the enhanced independence of the authority.
That is to be welcomed.
Amendment agreed to.
Section 36, as amended, agreed to.
Sections 37 to 39, inclusive, agreed to.
SECTION 40.
I move amendment No. 115:
In page 38, lines 20 to 22, to delete subsection (3) and substitute the following:
"(3) Prior to publication of each report under subsection (1), the Authority shall-
(a) furnish to the Minister a copy of the report, and
(b) arrange for a copy of the report to be laid before each House of the Oireachtas.”.
Amendment agreed to.
Amendment No. 116 not moved.
Section 40, as amended, agreed to.
Section 41 agreed to.
SECTION 42.
I move amendment No. 117:
In page 39, between lines 15 and 16, to insert the following subsection:
"(7) A scheme made under paragraph 5 of the Schedule to the Competition Act, 1991, and in force immediately before the commencement of this section shall continue in force as if it were a scheme made under this section and may be amended or revoked accordingly.".
This amendment relates to the authority's superannuation scheme.
Amendment agreed to.
Section 42, as amended, agreed to.
SECTION 43.
Amendments Nos. 119, 120, 121 and 122 are alternatives to amendment No. 118. With your agreement, we will take amendmentsNos. 118 to 122, inclusive, together.
I move amendment No. 118:
In page 39, subsection (3), lines 42 to 48, to delete paragraph (c).
These are very wide powers which have been preferred on the authority and the authorised persons acting both within the authority and on behalf of it. The whole area of due process is important and we would be mindful of the need to have these powers contained in such a way so as not to contravene any human rights legislation, particularly in view of the reversal of the burden of proof as enacted earlier on. The amendments introduces a number of safeguards which will ensure that the power to seize and retain books, etc., is done in such a way to preserve what we could describe as appropriate levels of due process and, in many ways, natural justice.
These amendments concern the authority's search powers and this is an area in which we must seek a proper balance ensuring on the one hand that the authority has adequate enforcement powers and on the other that any potential abuse is minimised. Amendment No. 118 would remove the power to seize documents and records completely. Seizure powers are vital in the investigation of potentially criminal activity and consequently I cannot accept that amendment.
I have some sympathy, however, with amendment No. 119 as precision is important in this area. However, I have not had sufficient time to consider it and would like permission to come back to it on Report Stage. Equally, I accept amendment No. 120 in principle. I concede that six months is too long. However, I think seven days is too short and I am considering proposing a one month period similar to that provided by the Company Law Enforcement Act. I will introduce an amendment on Report Stage.
I cannot accept amendment No. 121. The powers of authorised officers are limited and the term "records" is clearly defined. I see no need to further constrain the authority in exercising its enforcement powers. I can accept the principle in amendment No. 122 but again I think seven days is too short to be of practical use. I will table an appropriate amendment possibly involving a 14 day period on Report Stage.
Amendment, by leave, withdrawn.
Amendments Nos. 119 to 122, inclusive, not moved.
I move amendment No. 123:
In page 40, subsection (9), line 50, to delete "€1,900" and substitute "€3,000".
To cover myself for Report Stage, I note that in section 28 there is no reference in terms of the functions of the authority to the authority's role in enforcing the Act. I would like the opportunity to look at that on Report Stage.
I have no doubt the Minister will accommodate that request.
Amendment agreed to.
I move amendment No. 124:
In page 41, between lines 17 and 18, to insert the following subsection:
"(11) The reference in subsection (2) to the functions of the Authority shall, for the purposes of this section, be deemed to include a reference to the investigation by the Authority of, and the taking by it of proceedings (whether civil or criminal) in relation to, any contravention of an enactment repealed by section 45 that it suspects has occurred.”.
This is a technical amendment, a savings and transitional provision related to ensuring there is no doubt as to the range of law covered by a warrant. Its purpose is to cover situations where, for example, investigations or further proceedings are under way under existing competition legislation and these can be continued once this Bill is enacted.
Amendment agreed to.
Section 43, as amended, agreed to.
Section 44 agreed to.
NEW SECTION.
I move amendment No. 125:
In page 42, before section 45, but in Part 4, to insert the following new section:
"45.-Notwithstanding any other law, information which, in the opinion of-
(a) the Director of Corporate Enforcement,
(b) a member of the Garda Síochána, or
(c) such other person as may be prescribed after consultation by the Minister with any other Minister of the Government appearing to him or her to be concerned, may relate to the commission of an offence under this Act may be disclosed by that Director, member or other person to the Authority, a member or a member of staff of the Authority or an authorised officer.”.
This new section will permit disclosure of information to the authority by removing legal barriers which might prevent disclosure of suspicions of anti-competitive activity discovered by any of the categories listed above in the course of their duties.
Amendment agreed to.
Section 45 agreed to.
SECTION 46.
Question proposed: "That section 46 stand part of the Bill."
Section 46 deals with the Restrictive Practices (Groceries) Order, 1987. Many members of the committee have a keen interest in it and some question whether the section should stand part of the Bill. The committee has made a strong case for its retention. The Minister may have been taking a different approach.
Nothing is written in stone. Far be it for me to prohibit what somebody else might do in certain circumstances.
Question put and agreed to.
NEW SECTION.
I move amendment No. 126:
In page 42, before section 47, to insert the following new section:
"47.-(1) A person who, apart from this section, would be so liable shall not be liable in damages in respect of the communication, whether in writing or otherwise, by him or her to the Authority of his or her opinion that-
(a) an offence under section 6 or 7 has been or is being committed, or
(b) any other provision of this Act that prohibits an undertaking from doing a particular thing or things has not been or is not being complied with, unless it is proved that he or she has not acted reasonably and in good faith in forming that opinion and communicating it to the Authority.
(2) The reference in subsection (1) toliability in damages shall be construed as including a reference to liability to be the subject of an order providing for any other form of relief.
(3) An employer shall not penalise an employee for having formed an opinion of the kind referred to in subsection (1) and communicated it, whether in writing or otherwise, to the Authority if the employee has acted reasonably and in good faith in forming that opinion and communicating it to the Authority.
(4) Schedule 3 shall have effect for the purposes of subsection (3).
(5) A person who states to the Authority that an undertaking has committed or is committing an offence under section 6 or 7 or has failed or is failing to comply with a provision of this Act referred to in subsection (1)(b) knowing that statement to be false shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding €3,000 or to imprisonment for a term not exceeding 6 months or to both such fine and such imprisonment.
(6) Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act, 1851, summary proceedings for an offence under subsection (5) may be instituted within 2 years after the day on which the offence was committed or, if later, 2 years after the day on which evidence that, in the opinion of the person by whom the proceedings are brought, is sufficient to justify the bringing of the proceedings comes to that person’s knowledge.
(7) For the purposes of subsection (6), a certificate signed by or on behalf of the person bringing the proceedings as to the day on which the evidence referred to in that subsection relating to the offence concerned came to his or her knowledge shall be prima facie evidence thereof and in any legal proceedings a document purporting to be a certificate issued for the purpose of this subsection and to be so signed shall be deemed to be so signed and shall be admitted as evidence without proof of the signature of the person purporting to sign the certificate.
(8) Subsection (1) is in addition to, and not in substitution for, any privilege or defence available in legal proceedings, by virtue of any enactment or rule of law in force immediately before the commencement of this section, in respect of the communication by a person to another (whether that other person is the Authority or not) of an opinion of the kind referred to in paragraph (a) or (b) of subsection (1).”.
The purpose of the amendment is to protect whistleblowers. The report of the Competition and Mergers Review Group recommended that legislative provision should be made to protect people who, in good faith, report possible breaches of competition law to the authority from liability and damages arising from them being penalised by their employers as a consequence of making such reports. I have always agreed with this recommendation but provision for it was omitted from the Bill in the expectation that the matter would be covered by the Private Members' Bill, currently on Committee Stage, which seeks to provide general protection for whistleblowers. However, as it now seems unlikely that it will pass all Stages during the term of this Government, I have decided to incorporate appropriate provisions for protecting whistleblowers in this Bill. The provisions are modelled on the Protection of Persons Reporting Child Abuse Act, 1998.
That must be welcomed.
I thank the Minister and her officials for the amendment. At this stage I will admit defeat with my Private Members' Bill. I presume it will fall with the House and I hope the Minister will have an opportunity to sponsor it when in Opposition in the next Parliament.
Amendment agreed to.
Sections 47 to 50, inclusive, agreed to.
First Schedule agreed to.
SECOND SCHEDULE.
I move amendment No. 127:
In page 43, paragraph 1, line 22, after "office", to insert "or otherwise ceases to hold office".
The purpose of the amendment is to cover all eventualities.
The post of director of enforcement is now formally abolished. Will the Minister explain why that is the case? I am aware that the original incumbent of the office probably did not get the backup, in terms of staffing and so on, that would have been required. There was a prolonged period under the Minister's stewardship when the staffing situation left much to be desired. Given that background, is it logical to abolish the post? The seepage of staff, including the chairman, was dramatic. The Government appears to have been very slow in responding to what was, if we were being serious about competition, an acute need at the time. Having said that, I acknowledge that the Minister has moved to address the situation but I am curious why the post of director enforcement has been abolished.
Deputy Rabbitte is right to point out that the post was provided for in the 1996 Act, when enforcement powers were given to the authority. It has occurred mainly because the office has been reorganised and restructured. The director of competition enforcement was not empowered to institute proceedings. He was empowered to make recommendations to the authority, which decided whether to institute proceedings. Provisions for this post have not been carried over in the Bill, instead the investigative powers which were exclusive to the director of competition enforcement will be available to all the members of the authority. We are doing this to recognise the ongoing developments in the practice of the authority, flexibility in carrying out its remit and the potential for an increased volume of work being completed.
The authority is being reorganised into four operational divisions, each headed by a member, plus the office of the chairperson, whose powers have been strengthened. This has been done following the report of the consultants, Deloitte & Touche. One of the divisions is responsible for monopolies and another for anti-cartel enforcement. While these divisions are where most of the investigations will take place, competition issues requiring investigation and possible progressing to the stage of taking proceedings are also likely to arise in other divisions, such as that responsible for regulated markets. These issues can be investigated within the divisions in the proposed new regime, whereas the current regime channels all investigations via the director of competition enforcement to the authority for a decision as to whether to proceed in taking a case to the courts and to send a file to the DPP.
In a situation where there is a full agenda of matters to be investigated, it makes sense that investigative functions are invested in all members rather than in one member, as was the case in 1996. It should lead to more simultaneous investigations.
Amendment agreed to.
Amendment No. 129 is an alternative to amendment No. 128 and both may be taken together by agreement.
I move amendment No. 128:
In page 44, lines 49 to 54, to delete paragraph 3 and substitute the following:
"Certificates, licences and notifications
3. (1) On the commencement of section 45(c)-
(a) every certificate issued under section 4(4) of the Competition Act, 1991, and in force immediately before that commencement shall stand revoked;
(b) every licence granted under section 4(2) of the Competition Act, 1991, and in force immediately before that commencement (other than a licence to which subparagraph (2) applies) shall stand revoked, and
(c) every notification made under section 7 of the Competition Act, 1991, shall cease to have effect.
(2) Every licence granted under section 4(2) of the Competition Act, 1991, in respect of a category of agreements, decisions or concerted practices and in force immediately before the commencement of section 4 shall continue in being as if it were a declaration made under subsection (3) of the latter section and may be revoked by the Authority accordingly.”.
These are revised transitional provisions relating to notifications, certificates and licences issued under the existing competition legislation. As has been indicated in the debate on earlier sections, I intend to retain category licences which will become declarations for the purpose section 43 but discontinue the system of issuing certificates and individual licences. This provision is consistent with that approach. It is also consistent with the proposals of a revised EU competition regulation. As amendment No. 29 is inconsistent with this approach I am not disposed to accept it.
I accept the Minister's approach.
Amendment agreed to.
Amendment No. 129 not moved.
I move amendment No. 130:
In page 44, after line 54, to insert thefollowing:
"Mergers or take-overs notified before commencement of section 17, etc.
4. (1) In this paragraph 'Act of 1978' means the Mergers, Take-overs and Monopolies (Control) Act, 1978.
(2) Notwithstanding the repeals effected by section 45, the provisions of the Act of 1978, and of every instrument thereunder in force immediately before the commencement of section 17, shall continue in force for the purposes mentioned in subparagraphs (3) and (4).
(3) A merger or take-over (within the meaning of the Act of 1978) notified to the Minister in accordance with section 5 of that Act before the commencement of section 17 shall continue to be dealt with under that Act after that commencement and the provisions of that Act and of every instrument thereunder shall, accordingly, apply for that purpose.
(4) A proposed merger or take-over prohibited either absolutely or except on conditions by virtue of section 9 of the Act of 1978 (whether such prohibition took effect before the commencement of section 17 or, in the case of a merger or take-over referred to in subparagraph (3), after that commencement) shall continue to be so prohibited indefinitely save where the Minister, by virtue of the exercise by him or her of the powers under subsection (4) of that section 9, otherwise determines.
Section 21 of Interpretation Act, 1937
5. The provisions of this Schedule are without prejudice to the generality of section 21 of the Interpretation Act, 1937, (which, amongst other things, enables the prosecution of offences committed under repealed enactments).".
This amendment sets out the procedure for handling mergers which are notified prior to the commencement of the new merger control regime and are still awaiting decisions on the date the new system comes into play. Essentially, this means that mergers notified under the 1978 Act will be dealt with under that Act. The amendment also confirms the status of existing prohibition and conditional orders made under the 1978 Act.
Does this mean that any matter of which the Competition Authority is currently seized will be resolved to finality under the old regime?
Yes.
Does what I said earlier apply? The Tánaiste replied by saying that the Competition Authority in the new regime can put conditions, etc. Am I correct in——
The Minister can put the conditions under the 1978 Act. Obviously the recommendation would come to the Minister who can insert conditions.
Amendment agreed to.
Second Schedule, as amended, agreed to.
NEW SCHEDULE.
I move amendment No. 131:
In page 44, after line 54, to insert the following new Schedule:
"SCHEDULE 3
Redress for Contravention of Section 47(3)
1. In this Schedule-
'Act of 1994' means the Terms of Employment (Information) Act, 1994;
'employee' and 'employer' have the same meaning as they have in the Act of 1994.
2. In proceedings under this Schedule before a rights commissioner or the Employment Appeals Tribunal in relation to a complaint that section 47(3) has been contravened, it shall be presumed, until the contrary is proved, that the employee concerned acted reasonably and in good faith in forming the opinion and making the communication concerned.
3. If a penalisation of an employee, in contravention of section 47(3) constitutes a dismissal of the employee within the meaning of the Unfair Dismissals Acts, 1977 to 1993, relief may not be granted to the employee in respect of that penalisation both under this Schedule and under those Acts.
4. An employee may present a complaint to a rights commissioner that his or her employer has contravened section 47(3) in relation to him or her and, if he or she does so, the commissioner shall give the parties an opportunity to be heard by the commissioner and to present to the commissioner any evidence relevant to the complaint, shall give a decision in writing in relation to it and shall communicate the decision to the parties.
5. A decision of a rights commissioner under paragraph 4 shall do one or more of the following:
(a) declare that the complaint was or, as the case may be, was not well founded,
(b) require the employer to comply with section 47(3) and, for that purpose, require the employer to take specified steps,
(c) require the employer to pay to the employee compensation of such amount (if any) as is just and equitable having regard to all the circumstances, but not exceeding 104 weeks remuneration in respect of the employee’s employment calculated in accordance with regulations under section 17 of the Unfair Dismissals Act, 1977,
and the references in the foregoing subparagraphs to an employer shall be construed, in a case where ownership of the business of the employer changes after the contravention to which the complaint relates occurred, asreferences to the person who, by virtue of the change, becomes entitled to such ownership.
6. For the purposes of this Schedule-
(a) subsections (3) to (6) and subsection (7)(a) of section 7 of the Act of 1994 shall apply in relation to a complaint presented under this Schedule as they apply in relation to a complaint presented under subsection (1) of that section 7, with the following modifications, namely-
(i) the deletion in that subsection (3) of all the words from 'if it is presented' to the end of that subsection and the substitution of 'unless it is presented to him within the period of 12 months beginning on the date of the contravention to which the complaint relates or (in a case where the rights commissioner is satisfied that exceptional circumstances prevented the presentation of the complaint within the period aforesaid) such further period, not exceeding 6 months from the expiration of the said period of 12 months, asthe rights commissioner considers reasonable',
(ii) the substitution in that subsection (6) of a reference to a decision for the reference to a recommendation, and any other necessary modifications,
(b) sections 8 to 10 of the Act of 1994 shall apply as they apply for the purposes of that Act, with the following modifications, namely-
(i) the substitution in those provisions of references to a decision for references to a recommendation,
(ii) the addition to section 8 of the following subsection:
'(7) Proceedings under this section before the Tribunal shall be heard otherwise than in public.',
(iii) the substitution in section 9 of the Act of 1994 of-
(I) references to the Circuit Court for references to the District Court, and
(II) the following subsection for subsection (3):
'(3) An application under this section to the Circuit Court shall be made to the judge of the Circuit Court for the circuit in which the employer concerned ordinarily resides or carries on any profession, trade or business.',
and any other necessary modifications.".
This amendment sets out the procedure for an employee who has been dismissed as a result of supplying information to the Competition Authority and is linked to my amendment in relation to whistleblowers. The procedure is the same as that provided for in the Protection for Persons Reporting Child Abuse Act, 1998.
Amendment agreed to.
Question proposed: "That the Title be the Title to the Bill."
Before you continue, Chairman, on Report Stage, at the request of the Minister of State, Deputy Treacy, it is my intention to bring forward an amendment to the Industrial and Provident Societies Act, 1893, the purpose of which is to facilitate structural changes in the co-operative sector and to deliver on a commitment made in the social partnership agreement of 2000. The amendment is proposed to relax the voting requirements that apply to co-operatives for the purpose of effecting a change of name and an amalgamation with another co-operative.
It was intended to introduce this change as part of a separate Bill to modernise industrial and provident societies legislation. However, the drafting of heads of such a Bill have been delayed and I am anxious to introduce this particular change within the lifetime of the current Dáil, subject, of course, to the relevant procedural requirements of the Oireachtas being observed.
This appears to be a fairly substantial amendment proposed on Report Stage, which we will be taking in a few days, without any flagging of it whatever other than now. As an expedient, the Tánaiste is now introducing an amendment to this Bill which should, in her own words, have been separate legislation. This must be circulated at least in order that we know what we are dealing with next Wednesday.
I will circulate it. This has had the agreement of everybody. It is about the requisite percentage of people required to facilitate the merger of two co-operatives. As I understand it, all parties in the House have supported the changes.
I apologise for doing it at this stage. It is being done as a practical matter, given that the other Bill would not be ready during the lifetime of this Dáil. However, I will circulate the details of it to the Deputy this evening.
I thank the Tánaiste and note Deputy Flanagan's point.
In view of what the Tánaiste has said about other legislation, perhaps it might be more appropriate to change the Title to the Competition and Other Related Matters Bill.
Do you want to move such an amendment?
I want to be supportive of the farming sector because I know the Deputy is anxious about it too.
I admire the Tánaiste's new found interest in farming matters.
I am a farmer's daughter.
Rathcoole was once farming country.
I am advised by my officials that as a result of this the Long Title will be changing also.
Question put and agreed to.