Govt 'failed consumers' over car price fixing
The Government was accused today of failing to protect consumers after it was confirmed that the Competition Authority has recommended a number of car dealers be charged with price fixing.
An RTÉ Prime Time investigation identified dealers from five of the country’s biggest motor distributors in connection with alleged price fixing – Ford, Mitsubishi, Hyundai, Citroen and Volvo.
The five brands account for 20% of cars sold in the Republic.
The Director of Public Prosecutions will decide if action can be taken, but Fine Gael enterprise spokesman Phil Hogan claimed consumer rights were being ignored.
He said: “The allegations that some dealers in the Irish car industry have been engaged in price fixing are extremely disturbing and I would like to commend Prime Time for its thorough investigation.
“The practice appears to have earned some dealers millions of euro.
“The programme revealed just how easy it is for a cosy cartel to hike up prices, given the lack of effective legislation to protect the consumer, and the lack of a strong State body to enforce consumer rights.”
A spokesman for the Competition Authority said a decision on whether to bring dealers to court was now in the hands of the DPP.
“We can confirm that the Competition Authority has been investigating this sector for over two years and that a number of files have been given to the DPP with recommendations for action,” he said.
The Competition Authority and its seven dedicated anti-cartel investigators, including two detective sergeants from the garda Bureau of Fraud Investigation, have been looking into the alleged cartel for over two years.
Some 50 properties, mainly business premises, have been raided as part of investigations into car price fixing.
Any dealers found to be in criminal breach of competition rules could face five years in jail, and or fines of €4m or 10% of turnover, whichever is the greater.
Mr Hogan challenged Enterprise Minister Micheal Martin to explain in the Dáil how cartels had been allowed to operate.
Mr Martin insisted the Government was committed to ending unfair pricing by reforming and updating competition rules.
“It is the type of thing that we are endeavouring to eliminate from the Irish economy,” the Minister said.
“In terms of the price fixing, that really has no place in the Irish economy, and which we should not in any attempt endeavour to try and protect or shelter in this house.”
Ireland is only one of three European States with legislation to bring criminal prosecutions against cartels. But there have been no criminal convictions anywhere in Europe for a breach of competition rules since the laws were introduced in 1996.
Mr Hogan added: “This is a typical example of the moribund nature of this country’s consumer protection infrastructure.
“It’s high time that the Competition Authority was properly funded and given the power it needs, through reform of the Competition Act, to catch, fine, and disqualify those guilty of disgraceful price fixing.”
