Enterprise; Trade and Employment | Cost-of-Living increases
To ask the Tánaiste and Minister for Enterprise; Trade and Employment the action that can be taken to ensure that multiple price increases leading to severe costs of living issues are in any way challenged as to their reasons for such increases; and if he will make a statement on the matter.
In relation to the remit of my Department which includes responsibility for competition and consumer rights law, the Competition and Consumer Protection Commission (CCPC) is the independent statutory body responsible for promoting compliance with, and enforcing, competition and consumer protection law in Ireland.
In relation to the CCPC’s mandate in this area, their role is to ensure that prices are set independently by competing businesses, and those prices are then prominently displayed at the point of sale thereby enabling consumers to make informed choices about which supplier offers the best value. The CCPC do not tell businesses what prices to charge. Generally, traders in Ireland are free to set and change their prices for goods and services. Lower prices play a key role in attracting consumers, and traders compete to keep their prices low enough to attract consumers.
When the CCPC receive complaints on pricing, they assess them to see if they indicate a possible breach of one of the areas of competition or consumer protection law that the CCPC is tasked with enforcing. They take action on their own initiative when they suspect there may have been a breach. However, they cannot investigate behaviour which a consumer regards as unfair unless the behaviour may breach the law.
In a market economy like ours, businesses are free to set prices in line with market conditions, provided they are not in a dominant position in the market, and provided they do this without colluding with competitors. Excessive pricing may be illegal if a business is in a dominant position, where it faces little competition, and its customers have little bargaining power. When a business is dominant, it is not allowed to abuse its position. Businesses and their pricing decisions are constrained by the need to compete rather than by any legal obligation.
It is illegal for competing businesses to form a cartel – that is, an agreement to fix prices – or to agree a common pricing policy or to carve up a market in order that they do not have to compete. It is also illegal for businesses to share information about their future pricing intentions. Wholesalers may not dictate the retail prices charged for their products by independent retailers. As long as businesses do not collude, however, they are free to set their own prices and may observe their competitors’ prices and adjust their own prices accordingly.
When the CCPC receives complaints about pricing it assesses them to see if they indicate a possible breach of competition or consumer protection law. The CCPC can take enforcement action if an investigation uncovers sufficient evidence of a breach. The nature of enforcement action depends on the type of the breach and the nature of the evidence but can include referral to the Director of Public Prosecutions for a criminal prosecution.
Certain sectors due to their nature and their systemic importance (for example, energy) are regulated by specific sectoral regulators who can influence the pricing decisions of providers in that regulated sector.
Turning to my Department’s remit, we have been to the fore in updating and expanding our laws on consumer rights and competition.
The Competition (Amendment) Act 2022 gives our competition authorities the necessary powers to crack down on rogue operators that are found to be breaching competition law. Cartels, where they exist, will be broken up and companies abusing a dominant position can be suitably punished with heavy fines of up to 10% of global turnover. These new powers will act as a big disincentive for those taking part in anti-competitive practices, which drive up costs, freeze out start-ups and smaller businesses and lead to bad quality products and poor services.
The Consumer Rights Bill 2022, which will enter the Seanad shortly, is the largest reform of consumer rights legislation in 40 years. The new law consolidates and modernises consumer law and gives consumers new protections.
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