Dáil Éireann - Volume 454 - 15 June, 1995

Ceisteanna — Questions. Oral Answers. - Competition Authority Report.

5. Mrs. O'Rourke asked the Minister for Enterprise and Employment if he will consider using section 14 of the Competition Act, 1991, as a means of resolving the crisis at Irish Press Newspapers. [11051/95]

[1207] 6. Mr. Clohessy asked the Minister for Enterprise and Employment if he will make a statement on the recent forum which he held on the newspaper industry. [10975/95]

10. Mr. O'Malley asked the Minister for Enterprise and Employment the reason he has failed to announce his decision on the Competition Authority's report into the investment by Independent Newspapers on the Irish Press group in view of the commitment he made on 13 April 1995 that he would complete his consideration of the report within four weeks; and if he will make a statement on the matter. [10985/95]

Mr. R. Bruton: I propose to take Questions Nos. 5, 6 and 10 together.

In considering what action to take on the Competition Authority's interim report of its study of the newspaper industry with the assistance of legal advice, I have considered all the options open to me, including an investigation under section 14 of the Competition Act, 1991. Legal advice is that using section 14 is not a realistic option. Section 14 provides that, where the Minister is of the opinion that there is, contrary to section 5 of the Act, an abuse of a dominant position he may request the Authority to carry out an investigation. Given that the Authority has already concluded in its interim report that the Independent's investment in and loans to Irish Press constitute a breach of sections 4 and 5 of the Act, it is unlikely that the Authority would reach different conclusions under a section 14 investigation. The section 14 investigation could be open to challenge on the grounds that the Authority was biased, since it had already reached a conclusion on the matter in its recent report, and on the grounds of natural and constitutional justice. A further disadvantage with a section 14 investigation is that it would be limited to the issue of abuse of a dominant position contrary to section 5 of the Act and could not deal with a breach of section 4, anti-competitive agreements. A [1208] section 14 investigation would also be a lengthy process.

I have deferred taking a decision on the recommendations of the Competition Authority's report in the light of the recent decision by the board of Irish Press Newspapers to convene an extraordinary general meeting of shareholders on 28 June for the purpose of appointing a liquidator to the company. The board has also decided to convene a meeting of creditors pursuant to section 266 of the Companies Act, 1963. There is no role for me as Minister in the process on which the company has embarked.

I have already expressed the view, and I repeat it that the situation the Irish Press finds itself in is essentially a business situation compounded by industrial relations problems. The Irish Press titles have been suffering radically declining circulation over a long period. The relaunch of the Irish Press in tabloid form in 1988 did not assist the decline in circulation. The group has also had unhappy investment experiences with the Ingersol group which have gone seriously wrong, which has led to protracted litigation. The recent Supreme Court judgement represented a further serious setback for the Irish Press group. The industrial relations record of the company over a long period has been far from good and the current difficulties are a further indication of that.

My decision on the alleged breaches of competition law has nothing to do with the current situation in the Irish Press. The key issue for the group is new, additional investment.

A decision on whether the Independent group's investment in and loans to the Irish Press group are in breach of sections 4 and 5 of the Competition Act, 1991, can only be made by the courts on foot of what would undoubtedly be a lengthy court action. A decision to pursue such an action at this time would not offer any immediate solution to the current situation facing the Irish Press group.

I am, however, keeping the evolving [1209] situation under continuous review and taking appropriate legal advice.

It is regrettable that the Irish Press group has decided to pursue the option of liquidation rather than seek new investors on the basis of a viable business plan. The question of seeking new investors rests primarily with those involved, the new investors or the Irish Press as it currently exists. It is up to shareholders to look to possible future scenarios. I have no direct role in that. The country would be a better place if a revitalised Irish Press could have a viable, vibrant and commercial future.

In regard to the industrial relations issues, the Labour Relations institutions and in particular the Labour Court remain available to provide whatever assistance the parties might require. I again urge the management and unions involved to use the interim period to resolve their difficulties. I would remind all parties that the consequences of the overall situation facing the Irish Press are very serious, especially for the 600 employees and their families.

The forum on the future of the newspaper industry which was held on 8 May was attended by a wide range of interests, including proprietors, journalists, editors, trade union representatives, academics and politicians. The purpose of the forum was to stimulate a genuine public debate about newspaper ownership and competition in the industry. The main topics addressed were “Newspapers in the Democratic Market Economy” and “Employment in the Newspaper Industry; Meeting the Competitive Challenge”.

The forum was additional to a series of meetings I held with newspaper owners and editors and the social partners, the purpose of which was to give the major interests in the newspaper industry an opportunity of making their future plans and intentions known to me following the report of the Competition Authority. I regret that the management of Irish Press group chose to stay away from the forum.

Mrs. O'Rourke: Why did the Minister [1210] not announce his decision on the report of the Competition Authority within the time span publicly announced, before the crisis developed at the Irish Press? The Minister has engaged in blather, I would call it “whistling past the graveyard”. Does he agree he has been dilatory in his response?

Mr. R. Bruton: I disagree with the Deputy who also engaged in discussions on this matter. Entering discussions was the right way to proceed. Court action, of the nature outlined by the Competition Authority, would be a lengthy process——

Mrs. O'Rourke: What is the Minister's opinion?

Mr. R. Bruton: ——and would do nothing to ease the immediate crisis at the Irish Press. There were changes which dramatically altered the situation. As the Deputy will be aware, there was an industrial dispute followed by the Supreme Court's finding in respect of relations between Ingersol and the Irish Press. The directors of the Irish Press decided to put the company into liquidation as a consequence and are proposing to hold meetings to conduct that business.

Mrs. O'Rourke: What is the Minister's view of the report of the Competition Authority?

Mr. Rabbitte: He does not have one; he is the Minister.

Mrs. O'Rourke: I am not asking the Minister of State, I am asking the Minister and he does not need a bully boy beside him all the time to prop him up. What is the Minister's response to the report of the Competition Authority? Did he delay deliberately in giving it?

Mr. R. Bruton: As I have indicated on numerous occasions, I will consider these issues carefully. On the recommendations of the Competition Authority, the environment in which a [1211] decision will be taken has changed dramatically with the decision of the Irish Press to put the company into liquidation.

Mrs. O'Rourke: What is the Minister's decision?

Mr. R. Bruton: I have not reached a decision on these matters. I am assessing the new situation created by the proposed liquidation of the Irish Press.

Mr. E. O'Keeffe: A man of indecision.

Miss Harney: I find the Minister's attitude extraordinary. He is taking this view because he does not want to get tough with any of the newspaper interests. Although I agree he was not the cause of the problem, he has added to it. Does he accept that under the Competition Act he could have made an order, the effect of which would have been that the Irish Independent group would have had to divest itself of its interest in the Irish Press and that it is only in those circumstances there is any possibility of attracting new outside investors?

Mr. R. Bruton: The Deputy misunderstands the Competition Act; I do not have the power to make such an order.

Mrs. O'Rourke: There is such a power under section 14.

Mr. R. Bruton: The only way I can deal with the issue to which the Deputy referred is by initiating a High Court action. Under section 14 there is the power to initiate an investigation leading to the making of an order. It would not be feasible to make an order without adopting a section 14 approach.

[1212] Miss Harney: Who could have requested a section 14 approach?

Mrs. O'Rourke: The Minister.

Mr. R. Bruton: It is not possible to make an order without first carrying out a section 14 investigation.

Miss Harney: Who may initiate a section 14 investigation?

Mr. R. Bruton: The issue of initiating a section 14 report is not a viable option. Legal advice is that such an option would be open to considerable challenge in the courts, involving a very lengthy process with a delay before the matter could be considered by the Minister. A difficult court case would ensure because issues would arise not only of competition law but also of constitutional and natural justice.

Mr. T. Kitt: Will the Minister accept this hands-off approach has left everybody in the dark? To suggest that he must stand back for the shareholders to meet and to allow for the process of liquidation is reneging on his responsibility. Traditionally Ministers in the same position as he would have adopted a much more hands-on approach to this matter. This is a broad issue about the future of the Irish Press. Surely the public, particularly the 600 workers involved, should expect a hands-on approach.

The Minister talked about his wish for additional investment in the company and the need for a revitalised Irish Press, but we would much prefer to see a proactive Minister making decisions in regard to the Competition Authority and showing the way as suggested by many commentators and parties involved in the dispute. Rather than simply making statements, the Minister should become involved in bringing the parties together to ensure the future of the Irish Press.

[1213] Mr. R. Bruton: The Deputy misunderstands the scope of a Minister. I cannot create new investors or a viable business plan for the Irish Press. I am not privy to the financial circumstances that led to the decision to liquidate the company. I do not have the powers to deal with those matters; it is up to private shareholders to find investors to back business plans for their company.

Miss Harney: The Minister seems to adopt the attitude that if somebody is big and strong enough to threaten legal challenge it has the effect of neutralising the Minister. If Governments were to behave like that they might as well not exist. When the Independent group sought to increase its shareholding in The Sunday Tribune from 29.9 per cent to 53 per cent, one of the Minister's predecessors was threatened with legal action and although a plenary summons was issued it never materialised. I urge the Minister to have the courage to do the job for which he was appointed and make a decision in this matter. If he does not, there will be no new investors in the Irish Press.

Mr. R. Bruton: The same predecessor to whom the Deputy referred warned the Independent that if it issued loans to The Sunday Tribune he would take action against it, but no such action was taken.

Miss Harney: Because he had gone out of office.

Mr. R. Bruton: The Deputy is not entirely honest in this matter. The Irish Press for its own reasons, has decided to initiate an approach to liquidation. Is the Deputy suggesting that court action should be taken in that event?

Miss Harney: The Minister should have made a decision in the matter. He requested the Competition Authority to produce a report under the most minor provision — section 11 — of the relevant legislation while he could have requested it to produce a report under [1214] section 14. Even when he received the report, he set up a forum and then did not honour his own commitment to make a decision within a month. Now we are told there is no point in making a decision because there might be a legal challenge to it. The Minister is acting in a cowardly way. He has contributed to the problem and should make a decision, even now.

Mr. R. Bruton: I reject it is cowardly to become involved in consultation with the major players. To suggest there should not have been discussion with the major players on their intentions in the light of the Competition Authority report is extraordinary. Since I engaged in those consultations events have arisen that were entirely beyond my control, both in the area of industrial relations and in the financial position of the Irish Press on foot of a Supreme Court judgment. As a consequence of those events, which have nothing to do with me, the Irish Press has decided to propose to its shareholders that the company be liquidated.

Miss Harney: Who is the preferential creditor?

Mrs. O'Rourke: Why did the Minister delay in giving his opinion on the Competition Authority report? Was it a deliberate delay?

Mr. R. Bruton: I did not deliberately delay. I took part in careful consultation and circumstances changed dramatically in the course of those consultations——

Mrs. O'Rourke: While the Minister was weaving and dodging.

Mr. R. Bruton: ——by first an industrial relations problem, which took the Irish Press off the streets, and subsequently a Supreme Court decision which affected its financial position. On foot of that the directors of the company recommended to its shareholders that the company be put into liquidation.

[1215] Mr. E. O'Keeffe: Will the Minister elaborate on the recent statement by a well-known newspaper owner that the Irish Press would not go into liquidation because of his investment?

Mr. R. Bruton: I cannot account for the statements of other people.