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Competition Law

Analysis - debate - current awareness

09 DEC 2011

Competition Policy in the UK – Lessons from the Past Decade [2011] Comp Law 251

In this paper, the author, who recently stepped down as Competition Commission Chairman, reviews how UK competition policy has worked over the years since the last round of major reforms in 1998-2002.
The context is set with a brief overview of significant EU law developments in merger control, Art 102, anti-cartel enforcement and state aids. Turning to the UK, the paper examines why the system was comprehensively reformed a decade ago, and what were the reformers’ objectives. These are examined by legal category (cartels, mergers, etc) but also in terms of general themes such as de-politicising decision-making and promoting competition expertise, judicial accountability, fair processes and private enforcement. The somewhat ambiguous attitude to EU law and their expectation that independent authorities could be left alone to operate the system are also examined. Overall the aim was to set up a system in which competition economics could be properly applied within a workable legal framework and a reasonable timetable.
In judging whether experience has matched expectations, the paper notes the considerable body of well reasoned decisions, the robustness of the regime in face of economic and political pressure and the generally high regard in which the UK system is held world-wide. Less satisfactory is the experience of anti-cartel enforcement, both civil and criminal and the under-use of Chapter II. Merger control has in general performed well, albeit rather in the EU’s shadow; market investigations have achieved notable individual results but have lacked strategic direction in the selection of cases. Use of competition powers by regulators remains problematic and private enforcement has yet to take off. By contrast judicial control has on the whole been effective and Ministers have been successfully disengaged (apart from in a few high profile public interest merger cases).
On the wider issue, competition economics are applied much better than before but there is still no easy way to deal with large amounts of complex economic evidence within a workable legal framework and a reasonable timetable.
Although the paper concludes that the overall balance of achievement is favourable, it also notes that there are issues to be addressed in the current institutional reform process. Here the paper cautions against setting expectations too high and concludes that the lesson of the past decade is that things do not always turn out as planned and that it is better to exceed realistic expectations than to fail against unrealistic ones.
Peter Freeman

To read the rest of this article, see Competition Law Journal: [2011], Issue 4,  Articles (link for online subscribers who have already logged in click here).

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