Competition in several areas of Ireland’s services sector has declined, according to reports released today by the Competition and Consumer Protection Commission (CCPC). The findings form part of the watchdog’s “State of Competition in Ireland” programme, which tracks trends in the non-financial services sector over a 15-year period from 2008 to 2022.
The CCPC found that concentration and average markups have increased across multiple industries since 2016, giving certain businesses greater market power. By 2022, the top four companies in these sectors accounted for an average of 37% of the market, a 12 percentage point rise from 2008. The report noted that similar patterns have been observed in other advanced economies.
The increase in concentration was most pronounced in digitally intensive sectors such as Information & Communications Technology (ICT) services and Professional, Scientific & Technical services, which include accounting and legal services. In these areas, a small number of firms now account for a growing share of turnover. Conversely, markups fell in industries such as Arts, Entertainment & Recreation and Transport & Storage, indicating that competition has remained stronger in some sectors.
The CCPC also highlighted positive developments, noting that younger businesses are contributing to market dynamism, with rising shares of turnover and improvements in productivity.
In parallel with the competition analysis, the commission published reports on barriers to entry and expansion, identifying financial capacity, regulatory burdens, knowledge gaps, and legal costs as key obstacles. The CCPC stressed that addressing these barriers could deliver substantial benefits for the economy. “More than two decades have passed since the CCPC published its proposals on legal reform, yet issues continue to persist in the sector,” the report stated. The commission welcomed government commitments under the Action Plan for Competitiveness and Productivity to tackle these challenges.
Brian McHugh, Chairperson of the CCPC, said competitive markets are essential for a healthy economy. Speaking on RTÉ’s Morning Ireland, he warned that higher concentration allows dominant companies to operate with less pressure to innovate, potentially harming consumers over time. “We are seeing fewer companies, more powerful companies, and less new entry in certain sectors. This can reduce competition, stifle innovation, and ultimately affect consumers,” McHugh said.
The CCPC plans to use the findings to focus its efforts on areas where boosting competition could have the greatest impact. The watchdog concluded that competitive pressures are uneven across Ireland’s services sector and that the rise in concentration and market power, along with reduced turnover at the top, could pose long-term risks to the health of the market.
The reports signal the need for sustained government action to strengthen competition, particularly in industries where dominant players are limiting market entry and slowing innovation.
