Bill aims to curb criticism of policy on competition

The Competition Authority's freedom to criticise Government policy is to be severely curtailed by legislation due to be published next week. The Competition Bill 2001 will forbid the chairman of the authority from commenting on Government policy and ministers when he appears before Oireachtas committees.

The current chairman of the authority, Dr John Fingelton, has been highly critical of Government policy in the past, particularly in areas such as the failure to deregulate the taxi industry and the licensed trade. They are issues that have also been the subject of inquiries by Oireachtas committees. As recently as last June, the authority criticised the Government's approach to liberalising the electricity market, which has seen four new entrants exit after 18 months. The most recent example is ePower, which announced its withdrawal on Wednesday.

The heads, or draft outline, of the new legislation are to be published by the Tanaiste, Ms Harney, next week. Head 32 states that the chairman of the authority must appear before Oireachtas committees if called to do so. But when he appears, "the chairman shall not question or express an opinion on the merits of any policy of the Government or a Minister of the Government or on merits of the objectives of such a policy", according to the draft.

The legislation would prevent the chairman of the authority from discussing issues such as the Groceries Order with Oireachtas committees. The Groceries Order prevents large retailers embarking on the sort of price wars that could drive small retailers out of business and was retained by the Tanaiste last year against the recommendation of the authority. Ms Harney decided not to overturn the order after sustained lobbying from small retailers and other interest groups.

The Competition Act 2001, which is due to become law in the autumn, will also increase the maximum sentences for people convicted of serious anti-competitive offences from two years to three years. The change is significant because any crime carrying a five-year sentence is judged to be a serious criminal offence, with the consequence that the Garda are then entitled to arrest and interrogate individuals who are suspected of having committed them.

The three so-called "hardcore" offences to which the new sentences will apply are price fixing; bid rigging and market control - the restriction of supply to keep prices up.

The new Bill should also make it easier for the authority to obtain convictions against individuals accused of hard-core offences because the agency will not have to produce evidence that such activities are harmful, unless challenged by the defence.

The financial penalties for offences are retained at the current level of 10 per cent of turnover subject to a minimum fine of £3 million (#3.8 million).

Authorised officers of the Competition Authority will be allowed to raid the homes of company directors as well as their businesses.

The restrictions placed on the chairman seem to be at odds with other parts of the draft act which are intended to give the authority "a statutory power to issue opinions on regulations, existing and proposed legislation, and to advise public bodies on competition matters". The conflict is likely to be examined when the legislation goes to the Attorney General, Mr Michael McDowell, for approval.