A Critical Analysis of the Decision of the Competition Authority in the Guinness Case
| Author | Mark Russell |
| Position | Senior Sophister Law Student, Trinity College, Dublin |
| Pages | 98-118 |
A
CRITICAL
ANALYSIS
OF
THE
DECISION
OF
THE
COMPETITION
AUTHORITY
IN
THE
MARK
RUSSELL*
Introduction:
In
this
article
I
have set
out
to
conduct
an
internal
critique
of
the
decision
of
the
Competition
Authority
(the
Authority)
in
the
case.
Attention
is
given primarily
to
the
application
of
stated economic principle
in
the
case and
its
appropriateness
in
the
light
of
the
relevant
statutory
regime,
namely
the
1991.
2
There
are a
number
of
issues
raised
by
the case
which
will
not
be
considered
by
this
article,
not
least
amongst
these
the
important
procedural matters
which were
the subject
of
an
appeal
under
section
9
to
the
High
Court,
and
further
issues
regarding
the
appeals
procedure
itself.
3 The
significant
matter
of
whether
the
merger
.
Senior Sophister
Law
Student, Trinity
College,
Dublin.
I
am
indebted
to
Francis
O'Toole
(Department
of
Economics, Trinity
College,
Dublin)
and
Patrick
O'Reilly
for
their
helpful
comments
on
an
earlier
draft
of
this article. Any errors,
of
course,
remain
my
own.
1
Decision No.
512,
Guinness
Ireland
Group
Limited/United
Beverages
Holdings
Limited,
17
June
1998.
2
It
is
significant
to
note
that
due
to
various
misunderstandings
at
Ministerial
level,
the
case
was
not formally
considered
by
the
Minister
under
the
Mergers,
Take-overs
and
Monopolies
(Control)
Act,
1978, as
would
be
normal
procedure.
The
misunderstandings
related
to the
powers
granted
to
the
Minister
by
the
legislation
to
extend
the
30-day
limit
imposed
on
him to
either refer
the case
to the
Competition Authority
for
its
opinion
or
to decide
on
the
case
himself.
Under
the
legislation
the
Minister
may
extend
the
deadline
by up
to
30
days
if
additional
information
is
requested
from
the
undertakings
involved.
An
extension
of
this
kind
may
only be
made
once,
but
the
Minister accidentally
allowed
the
prescribed
time
limit
to
elapse
and the
agreement
was
permitted
to
proceed
by
default. Guinness,
however,
decided
to
notify
the
arrangements
to
the
Competition Authority
(following
a
complaint
to
the Authority
by
Irish
Wholesalers)
with
a
request
for a
certificate
under
section
4(4)
of
the
(this
was
later amended
to
include
a
request for
a
licence
should
a
certificate
not
be
granted).
For
a
background to
the
case
see
also
"Calling Time
on
Guinness"
The
Sunday
Business
Post,
29
June
1997.
3
See
M.
& J.
Gleeson
&
Co.
v.
Competition
Authority,
401, where,
inter
alia,
the
scope
of
appeal from
a
decision of
the
Competition
Authority,
the admissibility
of
oral
evidence
in
the appeal,
and
the question
of
whether
the
internal
procedures
of
the Authority
could
give
rise
to
claims
of
objective
bias
in
their
decisions were
discussed.
There
was
also
considerable
discussion
on
the
issue
of
costs,
which
is
currently the
subject
of
an
appeal
to the
Supreme Court.
©
2001
Mark
Russell and
Dublin University
Law
Society
A
Critical
Analysis
of
the
should
have been
give
consideration under section
5
of
the
1991
Act
has
also
been
omitted.
This
omission
is
based
on
the view
that
such
consideration
merits
its
own
individual
treatment
elsewhere.
The
Law:
For
any
reasoned
analysis
it
is
necessary
first
to
grasp the
unusual
relationship
in
this
case
between
section
4(1)
and
section
4(2)
of
the
1991.
Section
4(1)
provides:
Subject
to
the
provisions
of
this
section,
all
agreements
between
undertakings,
decisions
by associations
of
undertakings
and
concerted
practices
which
have
as
their
object
or
effect
the
prevention, restriction
or
distortion
of
competition
in
trade
in
any
goods
or services
in the
State or any
part
of
the
State
are
prohibited
and
void, including
in
particular,
without
prejudice
to
the
generality
of
this
subsection, those
which
-
(a)
directly
or
indirectly
fix
purchase
or
selling
prices
or
any
other
trading
conditions;
(b)
limit
or
control
production, markets,
technical
development
or
investment;
(c)
share markets
or
sources
of
supply;
(d)
apply
dissimilar
conditions
to
equivalent
transactions
with
other
trading parties
thereby
placing
them
at
a
competitive
disadvantage;
(e)
make
the
conclusion
of
contracts
subject
to
acceptance
by
the
other
parties
of
supplementary
obligations
which
by
their
nature
or
according
to
commercial usage have
no
connection
with
the
subject
of
such
contracts.
Section 4(2) provides:
The
Competition Authority
established
by
this
Act
("the
Authority")
may
in
accordance
with
section
8
grant
a
licence for
the
purposes
of
this
section
in
the
case
of
-
2001]
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