CCPC Questions Role of Bishops in School Book Market
The Competition and Consumer Protection Commission (CCPC) has sought an explanation from the Irish Catholic Bishops Conference, in relation to a possible breach of EU competition law. The consumer protection body is concerned that the behaviour of the Irish Catholic Bishops Conference has been prejudicial to the interests of the very many Irish consumers who are required to purchase school books. Specifically, they have outlined the following potentially illegal action by the bishops:
… the CCPC is concerned that the statements provided in your letter to Catholic schools dated 21 March 2017 may have the effect of limiting competition in the supply of religious education material in primary schools under Catholic patronage in Ireland.
Veritas is the monopoly publisher of religious instruction school text books in Ireland. The Irish Catholic Bishop’s Conference fully owns Veritas, and the Catholic Church is also the patron of almost all primary schools in Ireland (the Education Act requires the Boards of Management in all of those schools to “be accountable to the patron”). It is not illegal to be a monopolist but EU competition law makes it illegal to use such a dominant position, in order to “limit or control markets” to competitors. The complaint received by the CCPC suggests that the Irish Catholic Bishops Conference may have illegally limited and controlled the market for religious instruction text books, by requiring schools not to buy alternative books from a cheaper competitor, thereby forcing parents to pay higher prices for the Veritas books.
The Original Complaint To The CCPC
In October 2015, a member of Atheist Ireland complained to the CCPC that the Irish Catholic Bishops Conference was breaching competition law by imposing inflated prices for their religious instruction text books. Initially, the CCPC had to establish whether or not Veritas holds a monopoly in the market. As illustrated in the extract below from the CCPC response to the initial complaint, it was concluded that the publishing arm of the Irish Catholic Bishops Conferences does indeed “occupy a dominant position” for the purpose of competition law.
First Extract from CCPC Letter of November 2015
The next question for the CCPC, was to consider why the Veritas books were so much more expensive than equivalent books for other subjects, and whether these inflated selling prices were an abuse of a dominant market position. The CCPC concluded that:
“… EU jurisprudence suggests that excessive pricing cases are difficult to prove in practice. The CCPC is unlikely to engage in litigation in these circumstances, given the costs to the taxpayer of doing so …”
However, the CCPC did refer to an alternative and more easily demonstrable mechanism by which Veritas might be considered to have abused their dominant position in this market. As illustrated in the extract below, the CCPC indicated that it could be a breach of competition law if there were direct competitors to the Veritas books, and the Irish Catholic Bishops Conference instructed schools not to buy those competitor books.
Second Extract from CCPC Letter of November 2015
Bishops Write To All Catholic Schools After Competitor Launches New Books
Subsequently, the situation described above by the CCPC is exactly the circumstance that arose in the market for religious instruction text books. A publishing competitor to Veritas released a competitive set of new religious instruction text books. This appeared to be good news for the parents who are obliged to buy religious instruction school text books (either directly or through their schools) since the new CJ Fallon Friends in Faith series was substantially cheaper than the Veritas Grow In Love series. For example, the CJ Fallon book for 3rd class costs only €9.95, while the equivalent Veritas product costs €12.99. However, rather than enjoy a reduced cost for school books, Irish parents must continue to pay more than 30% extra to Veritas, as the Catholic Bishops have instructed Catholic schools that they can only use the Veritas books. This instruction to Catholic schools from the Irish Catholic Bishops Conference (or the Irish Episcopal Conference) which is illustrated below, was issued shortly after the competitive CJ Fallon books were published. It is important to note that Bishop Leahy who wrote this letter to State-funded Catholic schools, is also the President of Veritas.
Letter from Bishop Leahy to Catholic Schools
A Decision That There Are No Legal Concerns With Bishop’s Letter
Since this letter seemed to be exactly the evidence that the CCPC required in order to take further action, the same member of Atheist Ireland made a further complaint to the CCPC on 10th April 2017. After investigating for more than two months, on 27th June 2017 the CCPC initially concluded that the Irish Catholic Bishops Conference had no case to answer as they “do not make the teaching of religion compulsory” in schools. This response to the complainant is illustrated below.
First Extract from CCPC Response to Complaint on 27th June 2017
The complainant then highlighted for the CCPC that this was factually incorrect, since the teaching of religious instruction (along with the commensurate purchase of religious instruction text books) is very much compulsory in Irish Catholic schools. The CCPC response to the complaint also then highlighted the role of the “Council for Catechetics”, which was mentioned in the letter above from Bishop Leahy. As illustrated below, the CCPC took the view that Bishop Leahy’s letter above could not be considered to be contrary to competition law, as his letter was supported by decisions made by a “review process” completed by the “Council for Catechetics”.
Second Extract from CCPC Response to Complaint on 27th June 2017
Competition law states that it is illegal for the dominant provider in any market, to in any way limit or control access by their competitors to that market. In fact, in their original correspondence of October 2015, the CCPC had specifically stated that such an illegal act may occur if the Irish Catholic Bishops Conference ever sought to prevent competitors from selling religious instruction text books. When just such an instruction to limit this market exclusively to their own Veritas books was made in writing by the Irish Catholic Bishops, the CCPC then concluded that such decisions would not be illegal if they were made by a “Council for Catechetics”. It is quite extraordinary that the CCPC seems to have decided that there should be a derogation in competition law for monopolists who can offer religious reasons to deny market access to their competitors.
The member of Atheist Ireland who submitted the original complaint, continued to argue towards the CCPC that any “review process” within a Council of Catechetics or elsewhere, is not relevant to competition law. The pertinent fact with respect to competition law is whether or not a dominant provider has acted to limit the market to their competitors. Just because a decision to act in this manner may have been taken within a “review process” conducted by a Council of Catechetics, is not in any way exculpatory with respect to competition law.
Another Decision That There Are No Legal Concerns With Bishop’s Letter
Subsequently, the CCPC wrote back to the complainant on 14th July 2017, this time offering a different reason why the letter from Bishop Leahy could not be considered to be contrary to competition law. As is illustrated below, this time the CCPC argued that the letter from Bishop Leahy could not be a breach of competition law, due to the nature of the school patronage system and the primary school curriculum. After initially stating that the Church does not make religion compulsory in Catholic schools, and then stating that a “Council for Catechetics” mitigates any problems with respect to competition law, the third separate reason why the CCPC decided that the Church had no case to answer, related to the nature of the school patronage system and the primary school curriculum.
Email Correspondence from CCPC on 14th July 2017
Again, the complainant highlighted for the CCPC that their position was factually incorrect. Nothing within the structure of the school patronage system or the primary school curriculum suggests that school patrons may be publishing monopolists that are exempt from competition law. Specifically, if the Irish Catholic Bishops Conference wishes to be a publisher of school text books then it must adhere to exactly the same competition law as the others publishers of school text books. The test to be applied by the CCPC is whether or not the letter from Bishop Leahy, who is the President of Veritas (occupying the dominant position in the market) sought to limit the market to competitors, to the prejudice of consumers. The extract below from a subsequent letter written by the complaint to the CCPC, illustrates this point.
Extract from Letter written by Complainant to CCPC on 17th July 2017
It is notable that the letter from Bishop Leahy was sent not only to the principal but also to the Chairperson within the Board of Management at each Catholic school. It would not be normal for a Board of Management to be concerned with which individual text books are used in schools. For example, for all other subjects taught at primary level, there are multiple competitive books available, and different schools will select different products from those offered by various publishers. This selection is not a process that a Board of Management would typically be involved with, but Bishop Leahy included in his correspondence the Boards of Management that are obliged under the Education Act to “be accountable to the patron”.
One More Decision That There Are No Legal Concerns With Bishop’s Letter
Notwithstanding the very deliberate list of recipients and the very clear intentions expressed within the letter from Bishop Leahy, after six months of investigation the CCPC then managed to arrive at extraordinarily benign view of the letter to Catholic schools from the President of Veritas. Specifically, the on 20th October 2017, the CCPC proposed yet another new reason why there could be no breach of competition law in this case, by stating the following with respect to Bishop Leahy’s letter:
“There’s no recommendation in it. It was simply stating that only Veritas books had been authorised by the ecumenical council. There wasn’t any recommendation. It was merely a statement of fact so it wouldn’t be sufficient for us to take a case.”
As can be seen from Bishop Leahy’s letter illustrated above, the stated position of the Irish Catholic Bishops is that “Only programmes that have been formally approved … can be used in Catholic Primary Schools”. Yet again, the complainant had to explain to the CCPC that their position was factually incorrect. A direction from a school patron to a Board Of Management with respect to which books may and may not be used, is not a mere statement of fact. It is a clear instruction with regard to which books should be purchased and which books should not be purchased. In fact, it is difficult to imagine how the Irish Catholic Bishops Conference could have been any more clear in their intention to limit the access that their new publishing competitor might have to this market.
The CCPC was arguing that an instruction from the Irish Catholic Bishops, requiring that schools may only use materials published by the Irish Catholic Bishops, does not constitute a recommendation to avoid using books published by their competitors. The extract illustrated below is from correspondence to the CCPC written by the complainant, which represents the fourth time that reasons offered by CCPC for inaction, had to be explained as factually incorrect.
Extract from Letter written by Complainant to CCPC on 24th October 2017
Decision To Outline Legal Concerns In Writing To Bishops
It is difficult to understand how the CCPC took more than six months to investigate the complaint about Bishop Leahy’s letter, during which period the main results of the investigation were a series of factually incorrect reasons why they should take no action. Nevertheless, following the correspondence with the complainant that took place over this six month period, the CCPC eventually did write to the Irish Catholic Bishops to outline some specific concerns. That letter is illustrated below.
Page 1 of Letter from CCPC during October 2017
Page 2 of Letter from CCPC during October 2017
Response from the Council for Catechetics
It remains to be seen whether the Irish Catholic Bishops Conference will take any remedial steps on this issue, or if they will instead continue to force Irish parents to purchase the Veritas books that are more than 30% more expensive than the alternative CJ Fallon products. On 21st March 2018, the Council for Catechetics responded to the CCPC indicating that it may take them around six months to decide whether or not Catholic schools will be permitted to purchase a book like the one published by CJ Fallon.
Letter from Council for Catechetics to CCPC on 21st March 2018
The response from the Catholic Church to the CCPC outlines a position whereby the Irish Catholic Bishops Conference are a monopolist that is currently limiting the market to their competitor, that they will continue to do this for some months to come, and that they can’t yet say whether or not they will stop doing this in the future. If a burglar argued that they shouldn’t be prosecuted for robbing houses, as they’re going to decide in six months whether or not to give up robbing houses, their position would be unlikely to be viewed favourably. Citizens should not be treated any different under the law because they happen to be a bishop. If the letter from Bishop Leahy was contrary to competition law then there should be legal consequences that follow. A suggestions from the Council for Catechetics that they may or may not remove their prohibition on competitive products in a few months, offers no mitigation with respect to whether or not the letter from Bishop Leahy was illegal.
Conclusion
Atheist Ireland has long campaigned against the patronage system for Irish schools, but the law in this area does indeed permit the Irish Catholic Bishops to determine which books may and may not be used to teach their patron’s programme. However, the patronage system does not suggest that the Irish Catholic Bishops must be a publisher of religion text books … and EU competition law certainly offers no religious derogations for the abuse of a dominant position in a publishing market. If the Irish Catholic Bishops insist on publishing religion school books then they must abide by the same laws as all other publishers. If they cannot operate in this publishing market without also controlling a “review process” that may limit the market to their competitors, then they shouldn’t be permitted to operate in this publishing market. As illustrated in the most recent letter from the complainant below, the victim in this case is not just CJ Fallon. The real victims are thousands of parents all over the country who have been forced by the Irish Catholic Bishops to buy very expensive Veritas books.
Extract from letter to CCPC during Novemver 2017
There appears to be a prima facie case that the publisher in a dominant position for the supply of religious instruction text books, may have illegally limited this market to a competitor. This resulted in thousands of parents paying 30% more for some school books in September 2017, than they otherwise may have. In September 2018, will parents be again forced to pay inflated prices to the Irish Catholic Bishops Conference because this market is not working in the interests of consumers? It is now more than a year since the CCPC received a formal complaint on this issue and they have not yet responded to the complainant, indicating whether or not they will take any action. However, the Irish Catholic Bishops Conference should not require instructions from the CCPC before they adhere to competition law, and they should not require competition law to realise that their conflict of interest in this area is contrary to the interests of consumers.
