Company directors convicted of serious competition offences such as price fixing or bid rigging could face five years in jail under legislation published yesterday by the Government.

But the Competition Bill, 2001 proposes removing imprisonment from the statute books for some less serious competition offences. It also proposes stiff penalty fines for firms which break competition laws, a new regime to control media mergers, and major institutional changes to the way takeovers are examined.

The Bill proposes to transfer the responsibility for examining and deciding upon mergers and takeovers from the Minister for Enterprise, Trade and Employment to the Competition Authority. These examinations and notifications would also be based exclusively on the basis of competition criteria under the proposed legislation.

The new legislative structure would force the authority to make a decision either to allow a transaction to proceed or start a second investigation on a merger within one month of notification. Once a "second phase" competition investigation was initiated the authority would have a further three months to decide.

But the new Bill proposes that the Minister for Enterprise, Trade and Employment should retain the right to overrule a decision taken by the Competition Authority in cases involving the merger of media companies.

Under the proposed legislation the Minister has an option to overrule a decision within 30 days of a ruling by the authority.

The Minister would make the decision by taking into consideration "public interest" criteria rather than the "competition criteria" used by the Authority. These considerations include the strength and competitiveness of media businesses indigenous to the State and the extent to which ownership or control of media businesses in the State is spread amongst individuals. As a safeguard measure the Bill provides that either House of the Oireachtas could annul a Ministerial order within 21 sitting days.

The Bill would also increase the threshold level at which a merger investigation can be undertaken. Takeovers involving firms with a turnover of €40 million would be liable for notification to the Competition Authority compared to the current lower level of turnover at €25.4 million. Although, this condition would not apply to a merger between media firms.

Company directors convicted of serious competition offences such as price fixing, bid rigging or market sharing would face up to five years in prison under the new legislation. Previously, they would have faced a maximum of two years in jail. Although, imprisonment would not be considered for less serious offences under the Bill.

The penalty provisions included in the Bill provide for the retention of stiff financial penalties up to a maximum fine of €3.8 million or 10 per cent of a company's turnover.

The Bill would also facilitate the enforcement of EU competition law in the Republic by making breaches of the EU treaty an offence in Irish law.

The Bill was based on the recommendations of the Report of the Competition and Mergers Review Group. The Tβnaiste, Ms Harney, said yesterday it would modernise existing competition and mergers legislation.