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21/02
26 March 2002
COMPETITION COMMISSION WELCOMES ENTERPRISE BILL
Dr Derek Morris, Chairman of the Competition Commission (CC),
today welcomed the Government's proposals put forward in the
Enterprise Bill.
He said:
"The CC welcomes the proposed changes to the competition
regime. These will bring benefits to business and consumers
and, with stronger competition stimulating productivity and
enterprise, real gains to the economy.
"The Government is committed to the UK having a world
class competition regime of benefit to business and consumers.
The CC will become a fully independent competition authority
investigating mergers and markets against defined competition
tests. Except where matters of special public interest arise,
the CC will become the deciding authority on the competition
test. The CC will also decide on and implement such remedies
as it deems necessary and proportionate. Where appropriate,
the CC may require divestment of whole or part of a business
to remedy the competition concerns.
"The Government has set out its competition policy and
its implementation will be carried out by independent bodies.
The public can have a high degree of confidence in this. In
the last four years, at a time when all of the CC's monopoly
and merger remedies could have been modified or rejected,
only four out of nearly 50 have been, in two cases to no effect
as the CC’s recommended solution came about anyway (the
other cases involved a very politically charged issue of newspapers
in Northern Ireland, and a borderline case where the CC itself
was split and the Secretary of State went with the minority).
"Since 1998 the CC has sought to increase the transparency
of its procedures. It now routinely publishes issues and remedies
statements and, in cases that involve wide consumer concerns,
holds open meetings. Last year I signalled the CC’s intention,
in the new regime, to publish provisional findings part way
through its inquiries so that parties are made aware of our
analysis and can focus more fully on remedies to correct any
competition concerns. The introduction of this new stage in
its procedures will place some strain on the timetable and
it will be vital that the CC obtains evidence from parties
in good time. Consequently the Bill contains a provision for
the CC to impose monetary penalties on parties for the late
submission or non-provision of information but I would hope,
in the spirit of co-operation it endeavours to establish with
parties, the CC will have little need to exercise this power.
With statutory maximum timetables for merger and market investigations,
business will have certainty of decision dates.
"The CC will be fully accountable to both Parliament
and to those parties who appear before it. The CC will publish
reports to explain its decisions and through an Annual Report
to Parliament, will be open to scrutiny from Select Committees.
"Parties will also have a statutory right of appeal
against the CC's decisions. The appeals will be heard by the
Competition Appeal Tribunal (CAT), which will be independent
from the CC. Some respondents to the White Paper called for
a dedicated appeal mechanism and it was suggested the CAT
was best placed to fulfil this role as it is an already existing
tribunal, expert in competition with a speedy process. It
currently gives judgment on appeals within six months.
"The CC is committed to playing a vital role in increasing
the level of competition in the UK economy. Clearly it will
need to increase its resources to meet new demands. Last year
the CC's membership was further strengthened by the appointment
of 21 members drawn from the business, legal and economic
professions. In the months to come it will be recruiting further
high calibre professional staff, including a Chief Economist
and a Chief Business Adviser.
"The CC welcomes all the proposals in the Enterprise
Bill concerning its enhanced role. These measures, if adopted,
will bring certainty of timetables and decision making, transparency
of process and provide redress for parties harmed by anti-competitive
behaviour. This will result in real benefits to business and
consumers. The CC is committed to continuing to deliver fair,
thoroughly analysed and robust decisions on matters referred
to it."
Notes to Editors:
If the Bill is adopted:
- the CC will become determinative for the majority of merger
and market inquiry cases referred to it
- Ministers will be removed from all decisions bar those
deemed to raise issues of special public interest i.e. national
security
- a new substantial lessening of competition test will replace
the public interest test for mergers
- the public interest test in market inquiries will be replaced
by a competition focused test - that is, whether there are
adverse effects on competition
- there will be scope to take into account consumer benefits
when determining appropriate remedies
- the CC will be able to impose a wide range of remedies
- a statutory right of appeal against CC decisions will
be heard by the CAT
- grounds for appeal will include unlawfulness, procedural
unfairness and irrationality
- the CC will publish procedural rules for the conduct of
investigations with which groups must comply
- the CC will be able to advise the government on the impact
of the laws and regulations on competition. The government
has said it will respond publicly within 90 days
Timing:
- maximum timetables for investigations will be set in statute
- an indicative timetable will be settled early in the investigation
- the CC will have the ability to fine for the receipt
of information later than requested
Accountability:
- a provisional findings stage will be introduced for mergers
and market investigations
- the CC will publish reports to explain decisions and will
be required to give reasons for key decisions, e.g. implementation
of remedies
- statutory right of appeal to expert body, CAT, which will
be independent of the CC
- Annual Reports to Parliament
- Select Committee scrutiny
- checks and balances built into the regime e.g. obligation
to consult main parties on proposed remedies and to give
reasons
If the Bill is adopted the Competition Commission Appeal
Tribunals (CCAT) will be renamed the CAT. It will:
- be independent from the CC
- hear appeals against CC reporting side decisions
- hear claims for damages suffered as a result of anti-competitive
practices<
- hear claims for damages from representative bodies on
behalf of groups of named and identifiable consumers
CAT orders will be directly enforceable through the High
Court
Copies of the white paper "Productivity and Enterprise:
A World Class Competition Regime" and the government’s
response to the consultation are available from the DTI website
at www.dti.gov.uk/ccp/topics2/ukcompref.htm
Further information about the Commission can be obtained
from the website www.competition-commission.org.uk
Enquiries should be directed to Francis Royle, Press Officer
tel: 020 7271 0242
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