Facts ‘conjured up’ in VIVAS complaint, says VHI

VIVAS Health is more interested in complaining than competing, the VHI insisted yesterday after learning the company has urged the European Commission to take immediate action against the State-owned private health insurer for abusing its dominant position.

The complaint made by VIVAS to EU Commissioner for Competition Neelie Kroes also calls for action to be taken against the Irish State for supporting anti-competitive practices.

VIVAS has alleged that the situation had distorted competition in the private health insurance market. The company’s chief executive Oliver Tattan accused the VHI of violating the requirements of Article 82 of the EC treaty. He also claimed that last January the Irish Competition Authority (ICA), in its report on the state of competition in the Irish private health insurance sector, unequivocally found that the VHI was abusing its dominant position.

“The report specifically states that the VHI engaged in predatory pricing by only increasing its premiums by 3% in 2004 and confirmed that it engages in the practices to tying products — two practices that meet the definition of abuse of dominance,” said Mr Tattan.

He said VIVAS Health had no option but to take the issue to the EU because neither the minister nor the Government had taken any action to punish the VHI.

“All we have ever asked is that all competitors be allowed compete on a level playing field and subject to the same regulatory framework and according to the same set of rules,” he said.

And, he added, despite the dominance of the VHI with 75% market share, VIVAS health would be forced later this year to make risk equalisation subsidy payments to the State-owned former monopolist.

“This situation is absurd,” he said.

A spokeswoman for the VHI said the latest complaint made by VIVAS to the EU, like previous ones, was without foundation in fact.

She also accused Vivas of “conjuring up” an imaginary finding by the ICA — that it unequivocally found that the VHI was abusing its dominant position on the market — and said it would be informing the head of the authority of the misleading nature of their complaint.