Keeping up with competition law reform – don’t rush
In March 2012, the Government confirmed its plans to merge the functions of the OFT and the Competition Commission into a single competition law body, the Competition and Markets Authority.
As the next stage in the process, the new Enterprise and Regulatory Reform Bill was introduced to Parliament on 23 May 2012, with the expectation that the new authority will be operational by April 2014.
Although its passage through Parliament remains in its infancy, the new Bill has confirmed the expected changes to the UK competition law regime, namely:
- The establishment of a Competition and Markets Authority with the remit of promoting competition both within and outside the UK for the benefit of consumers;
- The abolition of the OFT and CC (to be replaced by the CMA);
- An increase in the powers of CMA to require persons to give evidence and produce certain documents/information for the purposes of merger investigations;
- The introduction of a new 40 working day time limit for statutory merger review;
- The removal of the requirement for “dishonesty” in individual prosecutions in cartel investigations.
It is the latter which is perhaps the most significant in terms of a substantive change of policy as it effectively introduces a lower burden of proof for the CMA in bringing about criminal prosecutions in cartel investigations. Only time will tell if it has any real impact in practice.
In addition to the above amendments, there are numerous other procedural changes which are intended to strengthen the competition law enforcement regime, but notably, there will be no move towards a mandatory merger filing regime.
With the operational target of April 2014 in mind, second reading of the Bill is currently scheduled for mid-June 2012, and while the 2014 target may seem relaxed at first glance, the possibility of primary legislative change and delay within the Parliamentary process does render the 2014 target both workable and practical.