On 14 October 2010 the UK Government announced its intention to change the institutional framework for enforcement of competition (antitrust) and consumer protection law in the UK. At present, the UK has a dual agency system consisting of the Office of Fair Trading (OFT) and the Competition Commission (the Commission). The OFT handles the enforcement of UK and European competition law and of consumer protection law, the licensing of consumer credit providers and preliminary investigations into mergers and markets that may not be functioning properly. The Commission undertakes more in-depth and detailed investigations of mergers and markets and hears certain regulatory appeals from sectoral regulators.

The Secretary of State for Business indicated that the Government plans to merge the Commission and the competition and market investigation functions of the OFT to create a single, streamlined competition and markets authority. He also indicated that the Government intends to move all relevant central Government funding for consumer bodies to the charity Citizen's Advice and to the local authority trading standards offices.

The Secretary of State gave a little more detail on the thinking behind this move in a speech to the Confederation of British Industry on 25 October. Specifically, he criticised the slowness of Competition Act investigations and the relative lack of enforcement under the current system, compared with other countries. Since the Commission has no role in Competition Act cases, however, these comments raise more questions than they answer.

A consultation process on the proposals will take place in 2011. Until then, details of the changes will remain uncertain.

For more information, click here to view our Client Advisory.