It has been a long time coming, but the the UK government has finally unveiled its new ‘integrated’ competition watchdog. A report is here and here. The new Competition and Markets Authority will subsume the Competition Commission and the antitrust functions of the FTC. It appears that it will also have an inquiry function like our Productivity Commission.
This all seems sensible. The split between the OFT and CC in the UK seemed odd to me. In some areas (e.g. mergers) the CC acted on OFT recommendation so the OFT did an initial investigation then the CC did a full investigation. Having one body subject to judicial review is more standard and would appear more streamlined.
One disappointing part is that the new body will not have the consumer protection parts of the OFT. Competition laws and consumer protection laws are intimately related. It makes sense to have them dealt with by a single integrated body. This is the case at the ACCC and it works well. The regulator is able to take a broad view of a market that ‘is not working’ rather than starting with either an ‘antitrust’ or a ‘consumer policy’ mindset. As a simple example, if a retailer is putting ‘undue pressure’ on a supplier is this an abuse of market power, unconscionable conduct, or misleading and deceptive behaviour? The ACCC can cover all these bases without having to refer to a second regulatory body.
So good to see the UK changes announced – but disappointing that they did not involve full integration of the CC and OFT.