OFT and CC working together to improve competition regime

41/09 8 April 2009

The OFT and Competition Commission (CC) are making improvements to their processes for market investigations following work by a recently established joint working group.

The OFT and the CC are committed to ensuring that the competition regime:

is responsive, timely and minimises financial burdens - for example through reducing duplication and faster decision making
makes optimal use of resources and expertise
makes the best use of public money by being efficient and cost-effective
provides consistency in policy and approach, and
is strong, robust and independent, and continues to be a world leader in the competition and consumer field.

The market investigation regime allows the OFT to refer a market to the CC for further investigation where it has concerns regarding one or more features of a market that may prevent, restrict or distort competition in the UK. Such references may be the outcome of a market study by the OFT.

The joint OFT/CC work has focused on how well the market investigation regime is operating and how it could be improved, particularly in the following areas:

timescale of references to the CC
sharing of information (within legal parameters), and
closer partnership working.

The OFT has agreed that, in market studies where a reference to the CC is one of the outcomes being considered at launch it will aim to consult on a reference within six months of launch (where this appears the most appropriate and proportionate outcome). In addition, the CC is looking to complete future market investigations in 18 months instead of the statutory maximum of 24 months, and less in the case of smaller markets.

The market investigation regime is designed to address a broad range of market sizes and problems, and the OFT has reaffirmed its view that smaller markets can be looked at using this tool.

Jonathan May, OFT Executive Director said:

'We are working closely with the Competition Commission with the aim of making the market investigation regime work as effectively as it can to the benefit of all parties involved.'

David Saunders, Competition Commission Chief Executive said:

'Market investigations are a key part of the UK's competition regime, and the Commission is determined to ensure that they continue to deliver effective outcomes as efficiently as possible.'

NOTES

1. The OFT published its Annual Plan for 2009-10 on 26 March 2009. The CC published its corporate plan on 8 April 2009. See Competition Commission website.

2. In February this year, the OFT and CC agreed a Memorandum of Understanding to promote greater clarity on their process for reviewing merger, monopoly and market undertakings and orders. See press release 15/09.

3. The market investigation regime gives OFT the power to make a reference to the CC if it has reasonable grounds for suspecting that one or more features of a market in the UK prevents, restricts or distorts competition. Following any reference, the CC must investigate, decide whether any features of the market have an adverse effect on competition and, if it decides that they do, take appropriate and proportionate action to remedy the adverse effects.

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