Chillin'Competition

Our friend Kit Brown (Matrix Chambers) has sent us an interesting blog post on the proposed reform of the UK competition system. Kit is one of the most talented Barristers of his generation and it is a great honour to publish his writings on this blog.

In March 2011 the Department for Business, Innovation and Skills launched a consultation on potential reform to the UK competition law landscape.  The consultation document, A Competition Regime for Growth: A Consultation on Options for Reform, sets out options in respect of virtually every aspect of the domestic regime apart from the substantive tests themselves.  Most notably, the Government is adamant that there shall be a merger of the two principal competition agencies, the Office of Fair Trading and the Competition Commission, creating a Competition and Markets Authority (CMA); it is considering amending the antitrust enforcement framework such that cases would be prosecuted by the CMA rather than decided in the traditional administrative manner; it is pondering the introduction of some form of mandatory merger notification system; and it is interested in removing the dishonesty requirement contained in the criminal cartel offence.  But this reform agenda comes just 8 years after the most recent major piece of competition legislation – the Enterprise Act 2002 – came into force and just 11 years after the entry into force of the most radical reform of them all here in the UK: the Competition Act 1998.  An important question is this: why yet more reform?

Initially, before the consultation document emerged, many in the profession suspected that the Government would look to merge the competition agencies as part of the “bonfire of quangos” [for a panorama of quangos, see picture above] announced shortly after the last General Election; that the merger of the OFT and CC would be motivated by a desire to cut costs.  After all, why have two agencies when one will do?  Cost-cutting is not, however, the Government’s motivation.  Instead, it considers that a merged agency will be better able to make flexible use of the powers currently available to the authorities; will be able to make better use of resources; and will become a stronger advocate for competition in the UK.  In particular, the CMA will be able to deploy its powers to inquire into markets more flexibly than is currently the case – at present, the OFT may conduct market studies or (where it suspects the presence of features of a market which have an adverse effect on competition) may formally refer markets to the CC for in-depth (and costly) investigation.

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