Competition Authorities

There are four main competition bodies which UK firms may encounter:

• The Office of Fair Trading, headed by the Director General of Fair Trading (DGFT), has strong new powers to impose penalties on companies that breach the Competition Act 1998. In addition it keeps watch on UK, EC and international monopolies, mergers, restrictive agreements and anti-competitive practices. The DGFT advises the Secretary of State, seeks undertakings from firms where necessary and can act directly to deal with certain practices.
  
  Memorandum of Understanding between the Office of Fair Trading and the Department of Trade and Industry.

• The Competition Commission has two main functions: it investigates and reports on matters referred to it by the SoS or the DGFT (and in some cases the utility regulators); and the Appeal Tribunals of the Commission hear appeals against decisions of the DGFT under the Competition Act 1998

• The Secretary of State for Trade and Industry who has overall responsibility for competition policy in the UK and takes the final decision to stop or change anti-competitive behaviour (including mergers) in the UK under the Fair Trading Act 1973. The Secretary of State is advised by DTI's Consumer and Competition Policy Directorate.

• The European Commission (Directorate General for Competition) has exclusive powers to act on certain large mergers with a European dimension. It also has powers to deal with restrictive agreements and anti-competitive practices when trade between members of the European Community, or in some cases the European Economic Area (EEA), is affected.

Sectoral Regulators

In addition a number of Sectoral Regulators (utility regulators and others) have a specific role to play in promoting or facilitating competition within their sectors. Some of these regulators also have the power to apply the Competition Act 1998 concurrently with the OFT. These regulators with such 'concurrent powers' are:

• Ofgem - in the energy markets
• Ofwat - in the water industry
• Oftel - in the telecommunications sector
• ORR - for railway services
• CAA - in relation to air traffic services
• Ofreg - for gas and electricity in Northern Ireland

Concurrent Powers (Competition Act 1998)

A number of sectoral regulators have powers to apply the Competition Act concurrently with the Director General fair Trading. These regulators have all the powers of the Director General of Fair Trading to apply and enforce the Act to deal with anti-competitive agreements or abuse of market dominance relating to relevant activities in their designated sector. The Director General of Fair Trading alone, however, has powers to issue guidance on penalties and to makes and amend the Director General of Fair Trading's Procedural Rules. The Competition Act 1998 (Concurrency) Regulations 2000 have been made for the purpose of coordinating the exercise of the concurrent powers and the procedures to be followed.

The general principle is that a case will be dealt with by whichever of the Director General of Fair Trading or the relevant regulator is better, or best, placed to deal with it. 

The Office of Fair Trading and representatives from the regulators work together to ensure that no single case is handled by more than one authority, to ensure consistency in casework, to coordinate the use of the concurrent powers, and to prepare guidelines.

The general duties of the regulators are set out in individual statutes. The Competition Act 1998 amends that legislation to provide that a regulator's duty to take licence enforcement action does not apply where the regulator is satisfied that, in a particular case, it is more appropriate to proceed under the Competition Act 1998.

The competition law framework which deals with monopolies in the Fair Trading Act 1973 has been retained. This allows scale and complex monopolies to be examined by the authorities. Generally the scale monopoly provisions are intended for dealing with a situation where prior infringement of the Competition Act 1998 has been proven and where there is the prospect of further abuse. However, because of the special circumstances of the utility sectors, the full use of the scale monopoly provisions is retained for the regulated sectors, whether or not there has been a prior infringement of the Competition Act 1998.

Further information

• See the Office of Fair Trading's Guideline on Concurrent Application to Regulated Industries.
• See a list of the sectoral regulators that have concurrent powers (with links to their websites)