The Competition Authority has sent files on three investigations into alleged price-fixing to the Director of Public Prosecutions and a number of major inquiries into alleged cartel behaviour are continuing, its director of enforcement, Mr Pat Massey, said yesterday.
This is first time that the authority has taken criminal proceedings against organisations alleged to be in breach of the 1996 Competition Act. Mr Massey was speaking at a conference in UCD, entitled "White Paper and the development of competition at national and EU level."
Mr Massey signalled that the authority now considered criminal prosecutions to be the "only effective remedy" to price-fixing and cartels.
He said the authority was now operating at full strength and the focus on criminal cases represented the culmination of groundwork carried out since 1996. The authority is also considering the possibility of summary prosecutions.
"It's payback time," said Mr Massey. "It is evident from the volume of complaints made to the authority from cases taken and from investigations carried out that there are reasons for serious concern that price-fixing and other forms of hard-core cartel activity represent a very serious problem indeed in our economy. Consumers have a right to be protected against such behaviour."
Citing an expression used in the US, Mr Massey said the high level of complaints indicated that the authority is "operating in an target-rich environment".
He declined to say which organisations were the subject of files sent to the DPP.
Asked whether he was confident that the DPP would bring criminal proceedings against the organisations, he said he was "almost certain" that it would, although the DPP had full discretion on the matter. "We've shown a very clear chain of evidence right the way through."
Questioned why the authority had not previously taken criminal proceedings, Mr Massey said it had concentrated on civil cases to establish legal precedents in respect of cartel-type practices. A further factor was that the authority had been understaffed.
Mr Massey accepted that pursuing only civil cases could be seen as "sending the wrong message, if all we would do was drag people into court and get them to give an undertaking". Mere warnings are ineffective and "undertakings" have no legal effect, he said.
The authority had started proceedings against the Licensed Vintners Association, the Vintners' Federation of Ireland and against a number of individual publicans following an investigation in late 1997 and early 1998. These cases have yet to be heard.
"In addition, proceedings were issued earlier this year against three dairies and two supermarket multiples following an investigation into liquid milk prices."
Mr Massey said the authority had been investigating the fuel retail sector for two years following up to a dozen complaints about pricing.
"It is likely that the authority will be announcing more investigations in the near future," said Mr Massey. "Cartels cost Irish consumers far more than the overcharging for which Tesco was fined. In the Tesco case it was claimed that overcharging was due, at least in part, to human error. In the case of cartels, there is no human error, cartels involve systematic overcharging of consumers in a well-planned and organised manner - that's what they're all about."
Mr Massey said it was not surprising that many of the authority's initial cases involved trade associations. "Perhaps if I might paraphrase Brendan Behan, in the case of trade associations it sometimes appears that the first item on the agenda is not the split but the fixing of prices."
