It ain't broke, but… - Government finally confirms how it proposes to fix the UK competition regime
The Department for Business Innovation and Skills today published its long-awaited response to its consultation on reforming the UK competition regime.
The document confirms the overdue decision to merge the competition functions of the OFT with the CC and to create a single competition body called the Competition and Markets Authority ("CMA"). In fact whilst some of the changes highlighted below are controversial, there are relatively few surprises in much of the response:
The merger regime comes through largely unscathed, with no change to the jurisdictional thresholds and no move away from the current voluntary system to a mandatory pre-notification system. The introduction of tighter and mandatory timescales (40 working days) for review sees the end of the current statutory merger notification process with its potential for a decision within 20 working days. Business will be disappointed the Government has not introduced a broader exemption from the merger regime for small companies with less than £5m of UK turnover and the significant increases in merger fees (up to £160k where the target's UK turnover is more than £120m) will no doubt also be of considerable concern.
The market investigation regime also remains largely untouched, with changes focussed on ensuring market studies and market investigation references are completed more quickly.
The most controversial change concerns the Government's adoption of its favoured option to remove the requirement for dishonesty when prosecuting individuals under the criminal cartel offence. This will likely make it much easier to bring individual prosecutions.
The most welcome proposal is to carry forward the use of independent panels to oversee second phase merger and anti-trust investigations. This ensures that much of the independent rigour which was a highly regarded core feature of the existing regime will continue within the new unitary body.
Time scales going forwards are not clear, but given that many of the changes will require primary legislative change, this will depend on Parliamentary timetables. It certainly seems unlikely that the CMA will be reviewing its first cases this year.