The Competition Authority is gearing up to take a much more active role in the economy, according to its annual report. Last year it received additional powers under the 2002 Competition Act and it has increased its staffing level considerably.
Old cases are being cleared out to allow the authority to concentrate on priority issues. Major reports on the professions, banking and the insurance industry are in preparation.
It is important that this momentum is maintained, as boosting competition can contribute significantly to economic wellbeing. A competitive economy provides a basis for increasing productivity and living standards. In the long term, it is also the most important policy tool for holding down inflation. This has already been demonstrated in sectors such as telecommunications and air travel, but competition is less evident in other sectors.
Some of these are now being put under the microscope by the Competition Authority. It will shortly publish a report on the professions and subsequently issue recommendations in this area. It has also initiated a study of the banking sector and it is examining the non-life insurance industry. While it would be unwise to prejudge the conclusions of these studies, it is evident that in many of these areas the consumer should be getting a better deal. The Government must therefore seriously consider implementing the recommendations of the authority and not allow the inevitable complaints of vested interests to stall it from taking necessary action.
The Competition Authority is also taking an increased "advocacy" role and this is an important element of its work. All too often, debate is dominated by lobby groups and business interests and the welfare of consumers receives little attention. The authority has made valuable contributions to the public debate in areas such as the deregulation of the pharmacy sector and reform of the taxi market.
However, as well as entering public debate, the authority also has substantial responsibilities in enforcing the law. As in many other areas of so-called white-collar crime, anti-competitive practices are rarely the subject of criminal proceedings. The 2002 Act increases both the authority's powers in this area and the penalties for convicted offenders. Two criminal investigations were instituted last year, 56 summonses were issued and 18 searches conducted. It should go without saying that it is important that the authority is seen to enforce the law rigorously and fairly and that, where necessary, serious abuses are pursued through the courts.
Promoting competition has been a relatively underdeveloped area of economic policy in this State. Now, however, it is one of the main policy tools available to ensure a productive economy. This puts a heavy onus on the authority, which has much ground to cover, but also on the Government, which has the final responsibility for policy action and for ensuring that the authority has the fire-power to successfully undertake its vital role.