State handling of cartels and mergers needs reform - anti-competition review

The anti-competition regime in the Republic has been given "3+ out of 5" by an international review. The review placed the Republic 15th in a list of 27 regimes.

It found the Irish regime was on a par with those of Finland and Spain but below European leaders Germany and the UK. The EU was included in the list, coming fifth.

The survey, by Global Competition Review, a specialist journal based in London, gave the top four places to the US, German, Australian and UK regimes, in that order. The fourth annual survey of competition regimes is published today. The score for Ireland was the same as in last year's review. While the Competition Authority, which oversees much of the anti-competition regime in the Republic, was praised for changes introduced during 2002, concern was expressed about cartel handling, "the head of the unit having recently left and few cases seeming to result in fines".

The journal said the Irish regime was "predictable" but that "if it can learn how to detect cartels and not be too disturbed by increased merger duties, it will be among Europe's best".

The review of Irish activity for 2002 noted the number of cartel and merger cases examined but also noted that no fines resulted and that there were no vetoes of mergers. During the year the authority issued 52 summonses and "17 dawn raids undertaken". Criminal proceedings were initiated in two cases but were still being discussed with the Director of Public Prosecutions, says the journal.

Respondents to questionnaires said "lip service" was paid to the idea of competition in the Republic. They complained the authority could not impose fines and had to go to the courts, where the standard of proof required provided a significant obstacle not faced by similar authorities in other jurisdictions. Following changes introduced in the mergers area during 2002, some respondents felt it was necessary to "wait and see" how the new dispensation worked. They felt the Irish regime had the laws required for preventing anti-competitive conduct but "considered the regime ineffective in the behavioural area".

"The law on the statute books can act as an effective deterrent but its deterrent effect can be blunted in its exercise," said one respondent. The journal said this pessimistic view "chimes with the regime's results in court, which stand at one conviction in the last 10 years."

Competition reform possibilities, says the journal, include addressing proof for cartels, and removing State monopolies.