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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.
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legislation is generally repealed.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
"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,
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