20 January 2017: The Competition and Consumer Protection Commission (CCPC) has today concluded an investigation into potential anti-competitive conduct by the Irish Property Owners Association (IPOA). The IPOA is a national association representing approximately 5,000 providers of private rented accommodation (landlords) across Ireland.
The IPOA became the subject of an investigation by the CCPC when, in December 2016, it released a press statement in response to Government legislation introducing rent controls in the private residential rental sector. In this statement, the IPOA stated that following a meeting of its members, property owners were considering a range of potential measures, including the introduction of a number of new charges to tenants and the withdrawal from State-sponsored rental schemes.
Competition law expressly forbids a trade association from co-ordinating the business conduct of its members, including the terms and conditions under which they are prepared to supply a product or service. To address the CCPC’s competition concerns, the IPOA has agreed to enter into an Agreement and Undertakings with the CCPC, under which the IPOA has given binding commitments:
Isolde Goggin, Chairperson of the Competition and Consumer Protection Commission said: “The CCPC views any attempt to co-ordinate business conduct very seriously as invariably consumers will suffer. Following the release of the IPOA’s media statement in December 2016, we opened an investigation and we have worked with the IPOA to bring about an effective and efficient resolution. The commitments provided by the IPOA allow for a swift conclusion of our investigation and importantly, ensure the IPOA’s commitment to fostering a culture of competition law compliance within its organisation and membership.
“While trade associations have the right to represent the interests of their members, it is important that they not only take an active role in ensuring their own compliance with competition legislation, but they must not allow or facilitate commercially sensitive discussions between their members. This investigation sends a warning to all trade associations and businesses that they must comply with competition legislation.”
The conduct of trade associations has been the subject of several competition related investigations. Recent cases involved the Approved Tour Guides of Ireland, the National Association of General Practitioners and the Irish Medical Organisation. More details can be found on ccpc.ie.
Background information: Competition law, landlords and trade associations
Private residential landlords are undertakings within the meaning of section 3 of the Competition Act 2002 (‘2002 Act’) and under EU competition law.
Section 4 of the 2002 Act (which mirrors Article 101 of the Treaty on the Functioning of the European Union) states that “…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 …”
The IPOA is an association of undertakings. When an association of undertakings advises its members to raise fees or that its members should pass on costs in a particular manner, this may constitute a decision of an association of undertakings and may potentially involve an infringement of EU and/or Irish competition law.
Under competition law, pricing and the setting of rent and other charges is a matter for each individual landlord. In 2011, the Competition Authority, a legacy organisation of the CCPC, intervened following the IPOA’s recommendation to its members that they should pass on the Household and Non Principal Private Residence (NPPR) Charges to tenants. Following this intervention, the IPOA withdrew its recommendation and issued a clarification stating that pricing is a matter for individual landlords and their tenants.