Competition Authority Publishes 2009 Annual Report

28 February 2010

The Competition Authority has published its 2009 Annual Report and launched a series of new information booklets on competition law and policy for consumers, businesses and public procurement officials. The information booklets are part of the Competition Authority’s strategy to raise awareness and understanding of why competition is good for consumers and the overall economy, and of the role of the Competition Authority.

The Competition Authority’s enforcement record continued apace in 2009 reinforcing the message that competition policy and enforcement is even more important in difficult times. Approximately one third of the total criminal convictions for competition offences were secured in 2009; ten of 33 criminal convictions. These ten convictions were for price fixing offences relating to the Citroën Dealers Association.

The Competition Authority continued to take decisive enforcement action in 2009. The Competition Authority successfully sought to have coordinated action by the LVA and VFI struck down by the Court. The Court found the LVA and VFI to be in contempt of court because of their December 2008 “price freeze” announcement which breached previous undertakings given to the High Court arising from a previous case brought by the Competition Authority.

This case was important for consumers. It is not in the public interest to have trade associations coordinate the prices of their members and it is a core principle of competition law they do not. Complementing its enforcement record in this area was the Competition Authority’s publication of guidance on the Activities of Trade Associations and Compliance with Competition Law.

The promotion of a culture of competition continued with renewed commitment in 2009. An increasing number of Competition Authority recommendations have now been implemented. At the end of 2009 over 40% of recommendations made since 2000, covering 12 reports on sectors of the economy, had been implemented, with a further 30% being progressed or not requiring any action at this time.

Two new reports were published in 2009. This includes the publication of the first two parts of the report on competition in the General Medical Practitioner profession.  By the time of publication, this report was able to record that the Authority had already secured the agreement of the Medical Council and the Irish College of General Practitioners to the Report’s two central recommendations.

According to William Prasifka, Chairperson of the Competition Authority, “2009 was a challenging and successful year. The Competition Authority strove to protect consumers from anti-competitive prices through cartel convictions, sending the message that trade associations are not allowed coordinate on price, and raising awareness of competition law and policy”

Highlights of the Competition Authority’s 2009 Annual Report include:

Enforcing Competition Law

• Ten additional criminal convictions were secured in relation to prosecutions of cartel activity relating to the Citroën Dealers Association. All the individuals convicted in 2009 received suspended sentences. Fines have been increasing. One defendant was sentenced to 28 days in prison for failure to pay the fine.
• The LVA and VFI were found to be in contempt of court because their “price freeze” announcement breached previous undertakings given to High Court arising from a previous case brought by the Competition Authority.
• In The Competition Authority v Beef Industry Development Society (“BIDS”) the Supreme Court held that the BIDS agreement was anti-competitive by object. It is now before the High Court to determine if it satisfies certain conditions and is allowed.
• The Competition Authority published guidance on collective action in community pharmacy, trade associations and compliance with competition law, and pay-TV exclusivity in apartment developments.

Assessment of Mergers & Acquisitions

• 27 mergers were notified to the Competition Authority in 2009. The decline in the number of mergers notified, compared to 38 in 2008 and 72 in 2007, is not surprising given the economic downturn.
• The Competition Authority initiated one full investigation of a merger in 2009, the merger of Metro/Herald. The merger was cleared with proposals.
• The Competition Authority’s decision to block the Kerry/Breeo merger was quashed by the High Court; this decision was appealed and the matter now lies before the Supreme Court.

Promoting Competition

• The Competition Authority published a series of booklets offering guidance on competition law and policy and two reports that looked at how competition is working in the import and distribution of products for retail sale and the general medical practitioner profession.
• The Competition Authority made three submissions to Government Departments and other bodies which identified public restrictions on competition. These submissions related to the code of practice for grocery good undertakings, resource allocation in the health sector and the economic review of the small public service vehicle industry.
• The Competition Authority designed a Big-rigging Road Show which raised awareness among public procurers of the harm caused by bid-rigging and the role of the Competition Authority in investigating such activity.

NOTES TO THE EDITOR

The Competition Authority’s information booklets are available on its website: www.tca.ie. Alternatively if you wish to get sent a copy of the booklets please ring 01 804 5400. Four booklets are available:

• Competition Benefits Everyone shows the benefits that increasing competition brings to consumers, businesses and society in general. The booklet outlines how competition promotes higher productivity and economic growth.  Specifically aimed at those involved in public policy, it details how an awareness of competition issues is beneficial when formulating policy. It gives examples of where increased competition has led to better choice for consumers and lower prices, such as in aviation and telecommunications. It also gives examples of areas of the economy where competition is not yet sufficient, along with recommendations on how to promote competition in these areas.
• The Guide to Competition Law and Policy for Consumers gives information on how competition benefits consumers and how cartels, anti-competitive mergers and abuses of a dominant position harm consumers and the economy as a whole. The booklet gives details of what to do if you suspect the existence of a cartel or other forms of anti-competitive behaviour.
• The Guide to Competition Law and Policy for Businesses outlines why competition is good for businesses – small, medium and large. As consumers of goods and services, businesses benefit greatly from competitive markets. However, businesses also have obligations under competition law. This booklet gives details of behaviour that is prohibited under Irish and European competition law. It describes some of the warning signs which may indicate that a breach of competition law is occurring and what to do if a business suspects this. It also includes information on the Cartel Immunity Programme.
• The Detection and Prevention of Collusive Tendering gives information to public procurers on the tell-tale signs of collusive tendering or bid-rigging and how to report it. Bid-rigging is a hard-core cartel offence and is seen throughout the world as one of the most serious breaches of competition law. It carries the strongest penalties, including prison sentences. This booklet gives guidance on some common types of collusive tendering and how to spot them.  Just as importantly, it details steps that can be taken during the tender process to help prevent collusive tendering occurring. Although aimed at procurement officials working in the public sector the booklet is of interest to anyone involved in either putting projects out to tender, or in bidding for them.

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Contact Information

Janet McCoy,         Press Officer,                     The Competition Authority
Tel: 01 8045455      Mobile: 087 915 5406         Email: jmcc@tca.ie

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