Competition Authority failing consumers, says former director

THE Competition Authority was criticised yesterday by its former enforcement director Patrick Massey, who said the watchdog was failing to adequately protect consumers from being ripped off by cartels.

Mr Massey said the gardaí should take over the prosecution of cartels from the Competition Authority, because no one had ever been jailed for price fixing. Meanwhile, cartels were pushing up the price of consumer goods by 10%, he said.

The Competition Authority is responsible for ensuring consumers are not ripped off. It has the power to prosecute companies for anti-competitive practices if they are operating cartels and price fixing. The 2002 Competition Act gave the authority more powers to prosecute individuals for price-fixing and those found guilty can face up to five years in jail or fines of up to €4 million.

Mr Massey said, despite the extra powers, and receiving hundreds of complaints, the Competition Authority is only prosecuting a handful of companies and individuals.

Mr Massey’s comments come as the National Competitive Council revealed Ireland as the most expensive and least competitive country in Europe.

Mr Massey said more vigorous enforcement was needed to ensure people are jailed for operating cartels. “No one believed someone could be jailed for accepting a corrupt payment until George Redmond went to jail. We need a similar conviction to get the message across about price-fixing,” he said.

The main problem seemed to be the 20% turnover in staff in the authority, which slowed the processing of prosecutions, Mr Massey said.

“It would be better if the gardaí took over full responsibility for investigating criminal cartels, because they have the skills to bring prosecutions,” Mr Massey said.

In the US and Britain, the FBI and Serious Fraud Office, respectively, are involved in criminal prosecutions against those operating cartels. Up to 40 people are prosecuted every year in the US for anti-competitive practices. This year, the chairman of Sotheby’s auction house was one of those prosecuted. But the Competition Authority rejected the claim that the gardaí would do a better job at prosecuting criminal cartels and said their cartel division has been restructured since Mr Massey left three years ago.

The authority’s cartel division has two full-time gardaí working with it along with a number of case officers, who prepare prosecutions. This is modelled exactly on the US system, their spokesman said.

“Our division is headed up by an American, who worked for the Federal Trade Commission.

“In the US, the cartels division of the Justice department, along with seconded FBI members, bring prosecutions, ” the Competition Authority spokesman said.

So far, up to seven anti-competitive civil cases have been settled, including cases against insurance companies, Tesco, Glanbia and Sligo Dairies.

The authority has five prosecutions currently in the courts for alleged anti-competitive practices by the Irish League of Credit Unions, the Licensed Vintners, Calor Gas, a beef processing scheme and a group of grain growers. There are other cases pending that cannot be discussed for legal reasons, the authority spokesman said.