Vivas Health has submitted a complaint to the European commissioner for competition, Neelie Kroes, asking her to take immediate action against VHI for what it said was its abusive, anti-competitive conduct, and against the State for its alleged unlawful support of anti-competitive practices by VHI.
The private health insurance company, which recently entered the Irish market, said the complaint highlighted the fact that the State, through its preference for the State-owned VHI, was distorting competition in the private health insurance market.
"In January 2007, the Irish Competition Authority, in its report to the Minister for Health and Children on the state of competition in the Irish private health insurance sector, unequivocally found that the VHI is abusing its dominant position in the market," said Vivas chief executive Oliver Tattan.
"The report specifically states that the VHI engaged in predatory pricing by only increasing its premiums by 3 per cent in 2004 and confirmed that it engages in the practice of tying products - two practices that meet the definition of abuse of dominance."
Mr Tattan said the Government had not taken any action against the VHI for those activities. "As a result, we feel that we have no option but to take this issue to the EU in the hope that justice will be served," he said.
However, VHI said the Vivas complaint had no foundation, and accused Vivas of being more interested in complaining than competing.
It said Vivas had "conjured up" an imaginary finding by the Competition Authority that the authority had unequivocally found that the VHI was abusing its dominant position in the market. It said: "The Competition Authority has recently undertaken a major review of the private health insurance market and no such suggestion has been made by them."
It added that it would be informing the commission's directorate general for competition of "the misleading nature of the Vivas complaint".
This is the second complaint Vivas has made to commission about the health insurance market in Ireland.
In January, the commission initiated the first stage of legal proceedings against the Government over exemptions to solvency requirements provided to the VHI following a complaint lodged by Vivas to internal market commissioner Charlie McCreevy.
