The Reform of UK Competition Policy

"Major reforms of competition policy in the UK do not happen very often and it is important that they are done properly and result in improvements. The government’s proposals in Parts 3 and 4 of the Enterprise and Regulatory Reform Bill represent the biggest change in domestic law since the Enterprise Act 2002 and aim to improve the quality of decisions and strengthen the regime, support the competition authorities in taking forward the right cases and improve speed and predictability for businesses.

The Bill does not, however, make any changes to the basic prohibitions but instead aims to provide a more effective system of enforcement through merging the Office of Fair Trading (OFT) with the Competition Commission (CC) to create a single Competition and Markets Authority (CMA), in the process removing an institution that has been a central part of UK competition policy, albeit under different names, since 1949.

This article assesses the changes proposed in the Bill in order to ask whether or not they will lead to a better system of competition law enforcement for the UK. There will also be a discussion of the process leading up to the Bill because this has determined the parameters of debate around the Bill as well as its content.

The focus of this article is on the institutional changes which are meant to improve control of anticompetitive agreements, single firm conduct and what is called oligopolistic markets. Merger control is only touched on in passing because merger activity varies with the economic cycle and so the amount of work in this area is much less within the control of the competition authorities. There is no discussion of the proposed reform of the criminal cartel offence, not because it is unimportant, but because this merits its own detailed consideration. The article starts by looking at the evidence for how well or otherwise UK competition law and its institutions have been performing. As well as an assessment of the number of cases which have been dealt with by the competition authorities, the pattern of cases is examined to see whether or not  particular areas or practices are highlighted. Although competition authorities are in part reactive, they are also meant to take action under their own initiative and this should be on the basis of some reasonable set of priorities.