The Gazette 1992

GAZETTE

JANUARY/FEBRUARY 1992

An Overview

The Competition Act, 1991

Introduction The Competition Act, 1991 introduces for the first time into Irish law comprehensive rules on competition. As such, the Act is based upon the competition rules of the European Community, mirroring the principles contained in the E EC Treaty and applying them in the domestic context. Whilst the Community's rules will continue to apply where trade between Member States is affected, the Competition Act will apply where competition within Ireland is undermined.

"undertakings", defined as "indi- viduals, bodies corporate or unin- corporated bodies of persons engaged for gain in the production, supply or distribution of goods or the provision of se r v i ces ". Generally, the rules will apply to both private and public companies engaged in commercial activities. It is also worth noting that the new rules will apply not only to industry and commerce but also to the professions and any institutions providing services. Section 4 - restrictive agreements and practices Generally, any agreement or practice between companies or individuals which restricts com- pe t i t i on w i t h in the State is prohibited and void by virtue of Section 4 (1) of the Act unless notified to, and permitted by, the Compe t i t i on Au t ho r i ty under Section 4 (2) of the Act. It should be noted, however, that an agree- ment which contains provisions which are unacceptable under Section 4 may still be enforceable provided those unacceptable pro- visions may be severed or other- wise removed from the agreement. Section 4 (1) provides that "all agreements between undertakings, decisions by associations of under- takings and concerted practices which have as their object or effect the prevention, restriction or dis- tortion of competition in trade in any goods or services in the State or in any part of the State are prohibited and void". Examples are given in Section 4 (1) of the type of practices which are unlawful, for example, price fixing or market sharing. It is important to distinguish between certain types of restrictive agreements or practices which will always be unacceptable and those which, although restrictive of com- petition, may be ultimately com- patible with the Act. For example,

The new competition rules are contained in Sections 4 and 5 of the Act. These provisions are based upon Articles 85 and 86 of the EEC Treaty, respectively. Generally, Section 4 prohibits restrictive agreements and practices while Section 5 prohibits the abuse of a dominant position. In reviewing agreements and practices under Sections 4 and 5 of the Act reference may be made to the practice and jurisprudence of the EC Commission and the European Court of Justice in relation to Articles 85 and 85 of the EEC Treaty. Reference may also be made to any analagous EC legislation. This has been made clear by the new Competition Authority which has been estab- lished under the Act. In particular, in reviewing agreements under Section 4, the Authority has stated that parties may refer to the case law of the Commission and Court in relation to Article 85 and any relevant Community rules, such as block exemption regulations. The new rules are to be enforced primarily through the Courts. In contrast to the situation at the EC level, the Competition Authority's primary role is to review agree- ments as to their compatibility with Section 4 of the Act. The Com- petition Authority does not have enforcement powers as such. Commencement The Act came into force on 1st October, 1991. However, Section 6 (2) (b) of the Act, which permits

by John Meade, EC & Competition Department, Arthur Cox

John Meade parties to take proceedings in the Circuit Court on the basis of Section 5, is not yet in force and indications are that it will not be brought into force until experience has been gained in the application of the Act. The previous restrictive practices legislation is generally repealed. However, the Minister for Industry and Commerce has stated that the 1987 Restrictive Practices (Gro- ceries) Order will remain in force whilst the Minister reviews a report prepared by the Fair Trade Commis- sion on the application of the Gro- ceries Order. There is provision in the Act for the continued application of the Groceries Order though it has been questioned whether these pro- visions have the effect of keeping the Groceries Order in place. Scope of the competition rules The competition rules will apply to

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