The Competition Authority v John O'Regan and Others

• Jurisdiction: Ireland
• Judge: MR JUSTICE FENNELLY
• Judgment Date: 08 May 2007
• Neutral Citation: [2007] IESC 22
• Court: Supreme Court
• Docket Number: [S.C. No. 77 of 2005]
• Date: 08 May 2007

[2007] IESC 22

THE SUPREME COURT

Denham J.

Hardiman J.

Geoghegan J.

Fennelly J.

Macken J.

No. 077/2005

Competition Authority v O'Regan

BETWEEN

THE COMPETITION AUTHORITY

Plaintiff

and

JOHN O'REGAN, MICHAEL GORMLEY, CARMEL DOWLING, SAMUEL ADAIR, MARK BAILEY, JEROME DAWSON, DAVID EASTMENT, GERRY FOLEY, KAY GEOGHEGAN, SELENA GILEECE, MARY GRIFFIN, ANN LLOYD, JIM McMAHON, CON O'BRIEN, ANN BYRNE AND TOMMY WEIR

Defendants

COMPETITION ACT 2002

COMPETITION ACT 2002 S14

COMPETITION ACT 2002 S5

TREATY OF ROME 1957 ART 81 S4

TREATY OF ROME 1957 ART 82 S5

TREATY OF ROME 1957 ART 82 S5(1)

TREATY OF ROME 1957 ART 82 S5(2)

TREATY OF ROME 1957 ART 82 S5(3)

TREATY OF ROME 1957 ART 82 S5(2)(d)

TREATY OF ROME 1957 ART 81 S1

CREDIT UNION ACT 1966

CREDIT UNION ACT 1997 S6(1)

CREDIT UNION ACT 1997 S6(3)

CREDIT UNION ACT 1997 S6(2)

CREDIT UNION ACT 1997 S6(1)(f)

CREDIT UNION ACT 1997 S46(2)

COMPETITION ACT 2002 S4

COMPETITION ACT 1991

COMPETITION ACT 1991 S4(1)

COMPETITION ACT 2002 S3(1)

RSC O.36 r41

UNITED BRANDS v COMMISSION 1978 ECR 207

HOFFMAN-LA ROCHE v COMMISSION 1979 ECR 461

TETRA-PAK v COMMISSION 1996 ECR I-5951

CENTRE BELGE D'ETUDES DE MARCHE - TELEMARKETING (CBEM) SA v COMPAGNIE LUXEMBOURGEOISE DE TELEDIFFUSION SA & INFORMATION PUBLICITE BENELUX SA 1985 ECR 3261

ISTITUTO CHEMIOTERAPICO ITALIANO SPA & COMMERCIAL SOLVENTS CORPORATIOPN v COMMISSION OF THE EUROPEAN COMMUNITIES 1974 ECR 223

OSCAR BRONNER GMBH & CO KG v MEDIAPRINT ZEITUNGS - UND ZEITSCHRIFTENVERLAG GMBH & CO KG & ORS 1998 I-7791

EEC REG 1/2003 ART 11(4)

DEANE v VOLUNTARY HEALTH INSURANCE BOARD 1992 2 IR 319

POUCET v ASSURANCES GENERALES DE FRANCE (AGF) & CAISSE MUTUELLE REGIONALE DU LANGUEDOC-ROUSILLON (CAMULRAC) & PISTRE v CAISSE AUTONOME NATIONALE DE COMPENSATION DE L'ASSURANCE VIEILLESSE DE ARTISANS (CANCAVA) 1993 ECR I-637

ALBANY INTERNATIONAL BV v STICHTING BEDRIJFSPENSIOENFONDS TEXTIELINDUSTRIE 1999 ECR I-05751

WOUTERS & ORS v ALGEMENE RAAD VAN DE NEDERLANDSE ORDE VAN ADVOCATEN 2002 ECR I-1577

SODEMARE SA & ORS v REGIONE LOMBARDIA 1997 ECR I-3395

HOFNER & ELSER v MACROTRON GMBH 1991 ECR I-1979

DANSK PELSDYRAVLERFORENING v COMMISSION OF THE EUROPEAN COMUNITIES 1992 ECR II-1931

SHERMAN ANTITRUST ACT 1890 S1 (US)

SHERMAN ANTITRUST ACT 1890 S1 (US)

TREATY OF ROME 1957 ART 230

TREATY OF ROME 1957 ART 10

COMMISSION DECISION OF 24.3.2004 RELATING TO A PROCEEDING UNDER ART 82 OF THE EC TREATY (CASE COMPC /C-3/37.792 MICROSOFT)

O'DONOGHUE & PADILLA THE LAW & ECONOMICS OF ARTICLE 82 EC 2006 101

WHISH REVIEW OF O'DONOGHUE & PADILLA THE LAW & ECONOMICS OF ARTICLE 82 EC COMPETITION POLICY INTERNATIONAL 2006 VOL 2 NO 2

EUROPEMBALLAGE CORPORATION & CONTINENTAL CAN COMPANY INC v COMMISSION OF THE EUROPEAN COMMUNITIES 1973 ECR 215

BRITISH AIRWAYS PLC v COMMISSION OF THE EUROPEAN COMMUNITIES 2003 ECR II-05917

TETRA PAK INTERNATIONAL SA v COMMISSION OF THE EUROPEAN COMMUNITIES 1996 ECR I-5951

TETRA PAK RAUSING SA v COMMISSION OF THE EUROPEAN COMMUNITIES 1990 ECR II-309

HILTI AG v COMMISSION OF THE EUROPEAN COMMUNITIES 1994 ECR I-667

HILTI AG v COMMISSION OF THE EUROPEAN COMMUNITIES 1991 ECR II-1439

BRITISH AIRWAYS PLC v COMMISSION OF THE EUROPEAN COMMUNITIES 2007 EUECJ C-95/04

FITZGERALD v KENNY 1994 2 IR 383

INSTITUTE OF INDEPENDENT INSURANCE BROKERS v DIRECTOR GENERAL OF FAIR TRADING (REQUEST FOR INTERIM MEASURES) 2001 CASE 1002/2/1/01(IR)

INSTITUTE OF INDEPENDENT INSURANCE BROKERS v DIRECTOR GENERAL OF FAIR TRADING 2001 CASE 1003/2/1/01(IR)

COMPETITION

Dominant position

Abuse - "Tying" abuse - Elements of tying - Constituents necessary to establish distinctness between products - Whether SPS product distinct to credit union representation services - Undertaking - Economic activity - Whether cooperation between individual member credit unions prevents ILCU from being undertaking - Höfner and Elser (Case C-41/90) [1991] ECR I-1979 followed.; Dansk Pelsdyravlerforening v Commission (Case T-61/89) [1992] ECR II-1931; Europem ballage and Continental Can v Commission (Case 6/72) [1973] ECR 215; United Brands v Commission (Case 27/76) [1978] ECR 207; British Airways v Commission (Case T-219/99) [2003] ECR II-5951; Tetra Pak v Commission (Case T- 51/89) [1990] ECR II-309; Tetra Pak v Commission (Case C-333/94 P) [1996] ECR I-5951; Hilti v Commission (Case T-30/89) [1991] ECR II-1439; Hilti v Commission (Case C-53/92P) [1994] ECR I-667 considered - Competition Act 2002 (No 14), ss 4 and 5 and 14 - Treaty of Rome 1957, Articles 81 and 82 - Appeal allowed and claim dismissed (77/2005 - SC - 8/5/2007) [2007] IESC 22Competition Authority v O'Regan

1 Judgment of MR JUSTICE FENNELLY delivered the 8th day of May, 2007 .

2 1. This is the first appeal to come before this court, which involves application of substantive competition law. The appeal is from the judgment of Kearns J in the High Court, delivered on 22nd October 2004. The learned trial judge made a number of orders against the defendants pursuant to the Competition Act, 2002. The defendants, for the purposes of the action, represent the principal association of credit unions in the State. They have appealed the High Court judgment and orders.

3 2. The plaintiff is the Competition Authority (hereinafter "the Authority"). It is established pursuant to statute for the purpose generally of furthering and supervising competition in economic markets in the State. It is empowered by section 14 of the Competition Act 2002 ("the Act of 2002") to bring actions, such as the present, to enforce section 4 (anti-competitive agreements, decisions and concerted practices) and section 5 (abuse of dominant position) of the Act of 2002.

4 3. The defendants were the elected members of the Board of the Irish League of Credit Unions ("ILCU") as of the date of the last annual report prior to the commencement of these proceedings. ILCU is an unincorporated association, having a place of business in Dublin. The Authority has sued the defendants as being representative of ILCU. While there is a dispute on the pleadings as to whether the defendants are properly sued in that representative capacity, no serious issue was taken on the point at the hearing of the appeal. It was accepted that alternative persons could be nominated.

5 4. The Act of 2002 was enacted in order to provide, by way of analogy with Articles 81 (section 4) and 82 (section 5) of the Treaty establishing the European Community ("the Treaty"), for the prevention of activities which restrict or distort competition in trade in the State or which constitute abuse of a dominant position in trade.

6 5. The present case principally concerns section 5. Though findings and orders were also made pursuant to section 4, the case for the Authority essentially stands or falls on the section 5 case. I will first set out the terms of sub-sections (1) and (2) of section 5. Sub-section (3) concerns mergers and acquisitions and is not relevant. The relevant sub-sections provide:

7 2 "(1) Any abuse by one or more undertakings of a dominant position in trade for any goods or services in the State or in any part of the State is prohibited.

8 (2) Without prejudice to the generality of subsection (1), such abuse may, in particular, consist in-

9 (a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions,

10 (b) limiting production, markets or technical development to the prejudice of consumers,

11 (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage,

12 (d) making the conclusion of contracts subject to the acceptance by other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts."

13 6. The present case principally concerns sub-paragraph (d): the Authority says that ILCU abuses a dominant position in the market for credit-union stabilisation services by requiring purchasers of that service also to purchase from it its representation services. Apart from adaptation of its wording to refer to trade within the State rather than the common market, section 5 of the Act of 2002 is identical with Article 82 of the Treaty.

14 7. Section 4 is a longer section. For the moment, it suffices to cite sub-section (1), which replicates, mutatis mutandis, Article 81(1)EC:

15 2 "(1) 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 in any part of the State are prohibited and void, including in particular, without prejudice to the generality of this subsection, those which-

16 (a) directly or indirectly fix purchase or selling prices or any other trading conditions,

17 (b) limit or control production, markets, technical development or investment,

18 (c) share markets or sources of supply,

19 (d) apply dissimilar conditions to equivalent transactions with other trading parties thereby placing them at a competitive disadvantage,

20 (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."

Credit Unions

21 8. The following account of the nature of credit unions is common to the judgment of the High Court and to the written submissions and is common case. Credit unions are individual autonomous savings and credit co-operatives established by groups of individuals who share a "common bond". The most...