Competition and Deregulation: A Review of Irish Experience

• DOI: 10.1177/0003603X0204700408
• Date: 01 December 2002
• Published date: 01 December 2002
• Author: Patrick Massey
• Subject Matter: Foreign Antitrust

The Antitrust BulietinJWinter 2002

Competition and deregulation:

areview

of

Irish

experience

BY PATRICK MASSEY*

I.

Introduction

715

During the past decade successive governments introduced mea-

sures to increase competition in the

Irish

economy.

This

began

with the passage of the 1991 Competition Act, followed 5years

later by legislation that introduced substantial penalties for parties

found guilty of breaking the law. Steps

have

also been taken to

liberalize public utility industries, which

had

traditionally oper-

ated

as

state-owned

monopolies.

A

new

competition

act

has

recently

been

passed

by

Parliament

and

proposals

have

been

advanced for further reform

of

ED

competition

legislation.

The

present article concludes that, while significant progress has been

made over the past 10 years, much remains to be done in terms

of

fostering greater competition and ensuring effective competition

law enforcement.

The balance of the article is structured as follows: The follow-

ing section provides a

brief

historical overview

of

the develop-

*Adirector of Compecon Limited and a member of the Irish Com-

petition Authority from 1991-2001.

AUTHOR'S NOTE: Any views expressed are those

of

the author.

©2003 by Federal Legal Publications, Inc.

716

The antitrust bulletin

ment

of

competition law in Ireland. Legislative changes intro-

duced during the past decade are then outlined and analyzed in the

following

three sections.

Subsequent

sections consider merger

policy, deregulation

of

public

utility industries and regulatory

impediments to competition in other sectors. Reforms

of

national

and EV competition legislation respectively are then considered.

Some conclusions are offered in the final section.

II.

The

development

of

competition

law

in

Ireland

Legislation to prohibit restrictive business practices in Ireland

was first enacted in 1953 prompted by concerns about attempts by

various trade associations to restrict competition. Introducing the

legislation the then Minister for Industry and Commerce informed

the Dail that:

For the past few years there has been a growing uneasiness among the

public because

of

the development and extension of restrictive prac-

tices in the supply and distribution of goods. . . . Over that period

there has flowed into the Department of Industry and Commerce a still

larger volume of complaint about the operation of restrictive practices

in

trade-a

volume of complaint which has shown no sign

of

diminu-

tion in recent months.'

The Minister indicated that the idea of introducing legislation

similar to the

V.S.

Sherman Act was considered but rejected in

favor of a control

of

abuse regime.! According to Hogan- the leg-

islation reflected acautious approach because it was somewhat

novel in Ireland at that time. It is worth noting, however, that the

Irish legislation predated similar V.K. legislation, which was not

enacted until 1956, while (West) Germany's cartel legislation fol-

lowed in 1957.

DAIL

DEBATES,

Oct. 31, 1952, col. 813.

The

Dail is the Lower

House

of

the Irish parliament.

2P.

MASSEY

&P.

O'HARE,

COMPETITION

LAW

AND

POLICY

IN

IRELAND

(1996).

G. Hogan, The Need

for

a New Domestic Competition Law,

IRISH

BANKING

REV.,

Winter 1989, at 34.

Competition &deregulation :717

Kennedy concluded that the introduction of the legislation had

asignificant positive impact, particularly in its early years, as it

was successful in removing barriers to entry in a number

of

sectors

and in reducing the incidence of retail price maintenance which

had previously been widespread.' According to Walsh, supermar-

kets

"would

not have developed as rapidly, nor as extensively as

they did

had

resale price maintenance remained in operation."!

The legislation nevertheless suffered from anumber

of

serious

shortcomings.

It

originally

excluded

most

service

industries,

although the scope

of

the legislation was gradually extended with

all

exemptions,

except

that

for

local

government,

ultimately

removed

in 1987.6

The

legislation

established

the

Fair

Trade

Commission (FTC). The

FTC's

role was to conduct inquiries on a

trade-by-trade basis into allegations of anticompetitive practices

and to report to the Minister, recommending what measures,

if

any,

might

need

to be incorporated into a Restrictive Practices Order

(RPO)

for

the trade concerned which then had to be approved by

the Dail. After 38 years, RPOs prohibiting specific anticompetitive

practices applied to only a limited number

of

business

sectors.

Commenting on this, the FTC argued that: "It is difficult to under-

stand

why

the competition laws should not be generally applicable

as they are in the other countries examined in this study."?

The

FTC

claimed that, on occasion, the threat

of

an inquiry

was sufficient to eliminate aparticular practice. Nevertheless sev-

eral

sectors

were

the

subject

of

repeated

inquiries,

due

to the

emergence

of

new or previously undetected practices.

For

exam-

ple,

over

aperiod

of

38 years the FTC conducted eight investiga-

4K.A.

Kennedy,

Competition

and

the

Fair

Trade

Commission

(1960)

(unpublished

MA thesis, University College Dublin). See also

K.A.

KENNEDY

& R.

BRUTON,

THE

IRISH

ECONOMY

(Studies No. 10, Brus-

sels, EU Commission, 1975).

J. Walsh, Restrictive Business Practices in Ireland: Legislation

and Administration, 19 ANTITRUST BULL. 803, 848 (1974).

FAIR

TRADE

COMMISSION,

STUDY

OF

COMPETITION

LAW

(1991).

7Id.

115.25.