ComReg, the telecoms regulator, is “monitoring the situation regarding price changes” after the annual price increases flagged by some of Ireland’s biggest telecom providers came into effect for customers this month.
Last year, Three Ireland, Vodafone and Eir committed to automatically raising prices in line with inflation every year – plus an additional 3pc – from this month, citing rising operational costs and the need for greater investment.
Price signalling is against the law and consumers can report potential price signalling to the CCPC
Eir capped its 2023 increase for residential customers at 8pc, using January’s Consumer Price Index (CPI) of 8.2pc as a benchmark, citing the cost-of-living crisis.
Daragh Cassidy from price comparison site Bonkers.ie said the move to inflation-linked annual price hikes suggests there is price signalling – which occurs when businesses make their competitors aware that they intend to increase prices. Price signalling is a breach of competition law.
“Sometimes telecom companies put up their prices – but this type of annual price hike didn’t exist in Ireland until now,” said Cassidy. “This whole thing – saying they’ll increase prices every single year – is unusual. It’s very, very coincidental that they are doing it at the same time.”
When asked whether the notice given by Eir, Three and Vodafone that they were going to increase prices had amounted to price signalling, a ComReg spokeswoman said the regulator is “monitoring the situation regarding price changes in line with our responsibilities”.
“ComReg is aware of the difficulties for consumers as prices rise across a large number of providers of key consumer goods and services, including telecoms, which are often non-discretionary,” she said.
A spokeswoman for the Competition and Consumer Protection Commission (CCPC), which polices competition law, said: “Under competition law, businesses must set their prices independently, based on their business’s needs.
"If a business knows their competitor is increasing prices, then they may be encouraged to also increase prices – since their customers are less likely to move to their competitor.”
Price signalling is against the law and consumers can report potential price signalling to the CCPC (on ccpc.ie). On its website, the CCPC says it “does not have a role in reviewing or approving price increases. In very specific circumstances, where businesses form a cartel and collude to fix prices, the CCPC can investigate and refer a case to the DPP for criminal prosecution.”
The spokeswoman added: “In terms of whether the reported conduct could suggest that price signalling has occurred, as the CCPC is an enforcement body, we cannot provide an indication of whether a business practice constitutes a breach of the law.”
In 2021, the competition watchdog forced the country’s six motor insurance companies to sign legally binding agreements to reform their internal competition law compliance programmes after a five-year investigation into alleged price signalling by insurers. All six companies denied involvement and there was no finding of liability.
In 2019, the CCPC twice wrote to Andrew Keating, then chief financial officer of Bank of Ireland, to warn him about price signalling in the mortgage market.