The Enterprise and Regulatory Reform Bill received Royal Assent and was enacted in April 2012. Amongst many other changes, it will bring about significant changes to the competition law enforcement bodies in the UK, merging the OFT and the Competition Commission as well as noteworthy changes to the substance of competition law.
Certain changes have come into force immediately, but the majority of changes to competition law are not likely to come into force until the end of 2013/beginning of 2014.The most important changes to be introduced under the Act are:
- The creation of the Competition and Markets Authority (CMA), combining the current functions of both the Office of Fair Trading and the Competition Commission. The OFT and CC will be abolished.
- The cartel offence has been amended to remove the requirement that a person acted dishonestly. A person can now be found guilty of a criminal offence if they agree with one or more other person to make or implement, or cause to be made or implement a list of specified cartel offences (such as price fixing, limiting supply, customer sharing or bid rigging). The person will not, however, be guilty of an offence if customers are given relevant information about the arrangements before they are entered into, or alternatively if information about the arrangements is made public (in a form specified by the Secretary of State). It will be a defence to the cartel offence to show that there was not intention to conceal the arrangements from customers or the CMA or if the person has taken legal advice on the arrangements.
- The CMA will be required to observe a mandatory statutory timetable when carrying out market investigations, and will be able to consider two or more markets together.
- Although the merger regime remains voluntary, the CMA will be able to require merging companies to provide hold-separate undertakings (preventing them combining their businesses) before they have completed a merger. Currently the OFT must wait for the merger to complete before taking such steps.
- Provisions allowing the Secretary of State to remove the concurrent competition powers of sectoral regulators (such as Ofcom, Ofgem, and the CAA) which entered into force immediately. The power seems to have been included in response to criticisms that a number of regulators are reluctant to use their concurrent competition powers – the provisions appear to be intended to impose a 'use it or lose it' incentive to encourage the regulators to intervene using their competition powers where necessary.
The only other competition powers that have entered into force immediately allow the OFT and CC to consult on policy, guidance and similar documents which the CMA can then adopt as its own on its creation. It is expected that the rest of the changes to competition law will be brought into force by order by early 2014.