Inept 'authorities'

The following statement was taken from the Competition Authority’s website.

When does the Competition Authority take action?

Anti-competitive behaviour occurs when firms agree to fix prices, limit output, divide business between them or abuse their market power, with no benefits to consumers. In these situations the Competition Authority will use its enforcement powers to act promptly and rigorously to protect the interests of Irish consumers and overall economic welfare. The Competition Act sets out the basic competition rules, give the Competition Authority the power to investigate breaches of the law and where necessary to bring civil and criminal prosecutions.

Strong language, with no room for any misunderstanding of intention.

Here are some extracts from a report in the Irish Times concerning an investigation by the Competition Authority into the insurance industry.

Insurers are protecting historically high profits and premiums by locking out potential competitors from the Irish market, according to a new Competition Authority report. It is illegal for businesses to abuse a dominant position in a given market. But Mr Fingleton said he did not believe that prosecutions could address the problems in the Irish insurance market.

So, on the one hand the Authority is determined to prosecute and protect Irish citizens but on the other the man in charge states that ‘prosecutions are not the solution’. Here’s another bit:

The authority last year pointed out that insurance brokers’ commissions were growing at a faster rate than premiums. The report shows that between 2000 and 2003, premiums increased by 120 per cent and intermediaries’ earnings grew by 184 per cent. Mr Fingleton said that there was no clear explanation for this.

The reason, of course, is obvious. As we all know, the function of a broker is to get the best and cheapest deal for his client. The problem in Ireland is that brokers are paid a percentage of the premium on every deal, so naturally they will try to maximize the premium – it’s not rocket science.

On Vincent Browne (Tuesday, 8th March) last week, Mr John Hogan of the Professional Brokers Association had the neck to actually defend this practice. Vincent, in his usual cutting and entertaining way, took him to pieces .

But here’s the strangest aspect of this report:

The authority expects that the Irish Financial Services Regulatory Authority will be able to implement many of its recommendations.

IFSRA? That toothless tiger, who, when informed by a whistleblower of the massive theft going on in AIB kept quiet until the same whistleblower told Charlie Bird. And when the full extent of the thievery was revealed, did we see IFSRA initiating prosecutions? No, instead they allowed AIB to carry out its own secret proceedings against the wrongdoers – including any punishments. IFSRA is hopeful that AIB will deign to inform it of any decisions or action taken.

Yes, yes, I know, it’s all very depressing, so I’ll end with a bit of a laugh. To make sure this problem is dealt with in the most competent and efficient manner they have called in…wait for it…

The Minister for Enterprise, Trade and Employment, Micheál Martin, said yesterday he would be arranging urgently to discuss the recommendations with the relevant Government departments and agencies.

So in 28 years time (The time it took officialdom to admit they were thieving from the elderly) we can expect to see Mick, taking ‘urgent’ action. I mean even for a Banana Republic it can’t get any more bizarre, can it?

Anthony Sheridan