Authority hears 31 allegations of illegal cartel moves

THE Competition Authority last year received 31 allegations of organisations trying to forge illegal cartels, according to the authority’s annual report. A cartel is an illegal agreement between two or more competitors not to compete with each other.

Typically they involve a conspiracy between a number of businesses whose basic aim is to cause consumers to pay more for goods and services than they would in a competitive market.

In order to crack down on, what it describes as “criminal conspiracies that are often very complex” the authority has appointed former gardaí to its ranks and also has a detective sergeant with the Garda Bureau of Fraud Investigation seconded to work with cartels division.

It has even set up, in conjunction with the DPP, a “cartel immunity programme” which allows individuals or groups working within a cartel to act as a whistle-blower on the activity potentially avoiding fines and prison terms. Of the 31 reports of criminal cartel behaviour received by the authority in 2010, one led to a detailed investigation being launched.

Six criminal cartel investigations were ongoing throughout 2010 of which six were nearing completion at the end of 2010.

In two of the cases, the investigation found there was no breach of the Competition Act and in the third case there has been insufficient evidence to warrant recommending a prosecution to the DPP. One case was completed with a file to the DPP recommending prosecution. The remaining two cases are actively being investigated.

In all, the Competition Authority received 235 complaints in 2010, resolved 109 after screening them, and assessed 112. Of those that it assessed, 47 are ongoing and 65 have been resolved. Its annual report it said 135 new complaints were received of anti- competitive agreements and abuses of dominance, 112 of which closed during the year.

It also completed a review of a number of complaints that were carried out over previous years. Those included 12 complaints of alleged criminal cartel behaviour and 31 complaints of anti-competitive agreements and abuses of dominance.

In 2010, the authority received 46 merger notifications, up a third on the 27 received in 2009. Mergers and acquisitions allow businesses to restructure so they can better compete. However, in some cases they can have a negative effect on consumer welfare in a variety of ways such as an increase in price or a reduction in output, thereby lessening competition. Of the 46, 40 were cleared and six were carried forward into 2011.

“2010 was a tough year for us,” said Declan Purcell, chairman of the authority.

“Despite reduced resources, we had an impact across all our functional areas. We tackled anti-competitive behaviour in numerous sectors of the economy. We also promoted the role of competition in Ireland’s economic recovery and will continue to do so into 2011. Competition benefits everyone.”