| In the UK responsibility for enforcing competition law is shared by the Office of Fair Trading (OFT), which assists the Director General of Fair Trading (DGFT); the Competition Commission (CC); and the Department of Trade and Industry (DTI), all of which are subject to the ultimate authority of the Secretary of State for Trade and Industry. Most frequently encountered is the OFT, a body established under the Fair Trading Act 1973 to assist the DGFT, whose responsibilities include gathering information on monopolies and mergers, investigating anti-competitive practices and maintaining a register of restrictive agreements, although this regime is currently being phased out as a result of the introduction of the Competition Act 1998 (see below). The DGFT is appointed by the government for a renewable five-year term and is fully independent. Confidential guidance concerning the likely treatment of proposed mergers is sought from the OFT, mergers are notified to the OFT using both formal and informal procedures, and the OFT will have primary responsibility for enforcing the new prohibitions on anti-competitive agreements and abuse of market power under the Competition Act 1998.
The DGFT takes the final decision following an OFT investigation, and will recommend a course of action to the Secretary of State. He may refer monopolies to the CC for further investigation, and will advise the Secretary of State on whether to refer a merger to the CC, although the Mergers Panel, an advisory body, will sometimes take part in this decision-making process in more complex cases. If the CC concludes that a merger is against the public interest, the Secretary of State may ask the DGFT to liaise with parties in order to negotiate suitable undertakings. If undertakings are not forthcoming, the merger may be prohibited by order. The Secretary of State can also make orders and secure undertakings following an investigation.
The CC has no power to investigate of its own accord, and may only act when a case is referred to it for investigation. It consists of a full-time chairman and a number of part-time members, so an ad hoc panel can be drawn from among its number to investigate any particular matter.
The Secretary of State has extensive powers in competition matters. He refers mergers to the CC, and it is to him that the CC reports. He has discretion to accept the CC's findings and recommendations, although if the CC finds that a merger is not against the public interest he has no power to prohibit it. This is a political appointment and is therefore often subject to change, which will of course affect the tenor of UK competition policy. The DTI is responsible for overall competition policy.
In 1999 the government proposed major changes to the merger control regime. If implemented, the government would relinquish its ability to affect the outcome of most mergers, this power going instead either to the DGFT or CC. The Competition Act 1998 (which comes into force on March 1 2000) introduces a new system modelled on Articles 81 and 82 (formerly 85 and 86) of the EC Treaty, to be administered and enforced primarily by the DGFT, who will receive new powers of investigation and enforcement comparable to those of the EU Commission. The telecoms, water, energy and railways regulators will have concurrent powers in their particular sectors. The CC will act as an appeal body from decisions of the DGFT, while retaining its present powers to investigate monopolies and mergers.
Mark Friend |
