Watchdog's zeal draws criticism

This week was not the first occasion on which the Competition Authority has been accused of over-zealousness in its mission to…

This week was not the first occasion on which the Competition Authority has been accused of over-zealousness in its mission to stamp out anti-competitive behaviour.

Last May, after what was described as a dawn raid on the offices of the Irish Road Hauliers' Association, one source likened the search to "a visit from the Gestapo".

But claims, reported in this newspaper yesterday, that its search of the headquarters of the Licensed Vintners' Association last month were more appropriate to the pursuit of "hardened criminals" have refocused attention on the authority's role.

Established in 1991 to succeed the Fair Trade Commission, the authority marked a change from the old control-of-abuse system, in which inquiries were followed by restrictive practice orders from the minister, to a blanket prohibition on anti-competitive behaviour.

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But it was not until the 1996 Competition Amendment Act that the authority won the power to initiate searches like that on the LVA offices. Until then, while it had the power to conduct searches, it had to take its cue from the minister.

In addition, individuals or companies could bring their own civil cases alleging anti-competitive activity. And in a more positive vein companies could, and still do, seek the authority's approval for business arrangements that have implications for competition.

But a belief that the existing system was not working adequately led to the 1996 legislation which gave the authority the teeth used in cases like the LVA search.

The prohibited practices it targets fall into two broad categories: anti-competitive agreements between businesses, typically pricefixing; and the abuse of a dominant position by a single operator or a small group of operators in the same area of business.

Before a search, officers are obliged to seek a warrant from a District Court. Once this is secured, however, they may enter and inspect any premises requiring any information relevant to the investigation.

Its officers cannot seize original records but may copy them - the search parties have been known to carry their own photocopiers - and the commercial sensitivity of information is not in itself sufficient reason to deny them access.

Where warranted by the evidence, the authority has power to take cases to court, where penalties for offenders can be harsh. If prosecuted successfully, company directors can be imprisoned for up to two years: their businesses can be fined up to 10 per cent of turnover. In the case of summary convictions the maximum penalties are £1,500 or six months' imprisonment.

The authority does not comment on individual investigations. But apart from the LVA raid other searches which have become public include last year's at the Road Haulage Association, where a case arising is due in court next month, and the Irish Veterinary Union.

Opel Ireland has also suffered the authority's attentions and had to amend an advertising campaign on car prices as a result. And in 1996, five ferry companies, P&O, Stena, Brittany Ferries, Sea France and North Sea Ferries, were fined £600,000 following an investigation into alleged fixing of exchange rates for sterling.

The authority has four members including its chairman, Mr Patrick McNutt, and 20 staff in its Parnell Square headquarters in Dublin. It is an independent body, but exists under the umbrella of the Department of Enterprise, Trade and Employment.