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OFT asked to consider referring the market for the supply of newspapers and magazines to the Competition Commission

37/07    8 March 2007

The OFT has received a request from the National Federation of Retail Newsagents (NFRN) to consider whether to refer the market for the supply of newspapers and magazines in the UK to the Competition Commission (CC) for a market investigation.

Under the Enterprise Act, the OFT may make a reference to the CC if it has reasonable grounds for suspecting that there are features of a market that prevent, restrict or distort competition. The OFT is considering the NFRN's request in the light of its guidance as to when references to the CC will be made.

This request has to be addressed in addition to the OFT's current work on the draft Opinion and the review of the Code of Practice. While these fall to be examined under separate and distinct legal frameworks, the OFT recognises the close links between these three pieces of work. The need to examine the NFRN's request properly, in tandem with the existing processes, will impact on the timing of the Code review and the Opinion. While the OFT is aware of the need for expediency, it is essential to ensure consistency between these pieces of work.

Industry has asked the OFT for an indication of the sequencing of these three pieces of work. Once the Secretary of State has received the OFT's advice on the Code and made his final decision, the OFT will publish its advice and the final Opinion. Thereafter, and taking into account the conclusions reached in the Code review and Opinion, the OFT will publish for consultation its provisional position on whether or not to refer the market to the CC. Following this consultation, the final decision on whether to make a reference will be published.

NOTES

1. Section 131 of the Enterprise Act 2002 contains the OFT power to make market investigation references.

2. Download Market Investigation References: Guidance about the making of references under Part 4 of the Enterprise Act (March 2006) (pdf 1mb).

3. See the OFT's press release 94/06, 31 May 2006, Competition concerns about newspaper and magazine distribution agreements.

4. The legal framework for the NFRN request is the Enterprise Act 2002, in particular section 131 of this Act. For the review of the Code of Practice it is the Fair Trading Act 1973, the review being conducted under section 88(4) of this Act. With regard to the Opinion, the framework is the Competition Act 1998, following the request from a group of publishers, distributors and wholesalers for an industry-specific block exemption under that Act. The aim of the Opinion is to provide guidance to assist the parties to newspaper and magazine distribution agreements in self-assessing whether their agreements are likely to be compliant with the Chapter I prohibition of the Competition Act 1998.

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