Changes to the UK’s competition regime

Published On 16/10/2012 | By Peta Stevenson | Reform

On 15 March 2012, the U.K.’s Department for Business, Innovation and Skills (BIS) announced the UK Government’s highly anticipated proposal for reform to the UK competition regime.  Key announcements include:

  • The merger of the Office of Fair Trading (OFT) and Competition Commission to form a new Competition and Markets Authority (CMA).  First phase merger and market decisions, as well as strategy and governance will be made by a Board, and second phase investigations will be taken by a group of independent panellists;
  • The removal of the requirement to prove dishonesty in order for an individual to be found guilty of a criminal cartel offence, and an exclusion for agreements if details are published before implementation;
  • The merger regime remains voluntary, but with enhanced powers to enforce business separation, new statutory timetables and higher fees;
  • Retaining separate sector regulators, but with greater work by the CMA thus allowing the new enforcer to take antitrust cases from sector regulators, consequently strengthening the primacy of general competition law;
  • Rather than introducing a prosecutorial regime under which the CMA could prosecute cases before the Competition Appeal Tribunal, the Government has approached concerns through incremental adjustments to the existing antitrust and markets regimes, aimed at increasing rigour, speed and uncertainty.  These include giving the CMA power to conduct cross-market investigations (such as on pricing issues) leading to a more targeted approach for tackling recurring sources of complaint, expanding statutory phase 1 and phase 2 time limits, and other measures aimed at addressing perceptions of confirmation bias.

The new regime was subsequently approved by the UK Parliament and it is expected that the CMA will be fully operational by April 2014.

In October 2012, the OFT issued new guidance on how it will conduct its decision-making processes as well as procedural enhancements, which will remain in effect until its enforcement powers transfer to the CMA in April 2014.

Full details can be found here, but perhaps most significantly, in cases where the OFT is considering imposing a financial penalty (a power the ACCC does not have, such authority being limited to the courts in Australia), it must permit the parties to make representations on the way the penalty has been calculated.

Photo credit: ReeSaunders / Foter.com / CC BY

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About The Author

is a partner in the Sydney office of King & Wood Mallesons where she specialises in competition litigation with experience in a wide range of jurisdictions. Peta also advises clients on the application of the anti-competitive conduct, consumer protection and access provisions of the Competition & Consumer Act 2010 (Cth) and related state legislation. In 2001/02 she undertook her LLM at the University of Cambridge, during which time she developed a passionate if fleeting interest in rowing.

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