Government announces plans for future UK competition regime

The Government has announced its response to the competition regulation regime consultation in A Stronger Markets Regime, published today.  Key extracts relevant to the work of The Cooperatition Incubator are:

  • pg 6 – Opinion on proposals to enable the CMA to provide independent reports to Government on public interest issues was divided. The Government has decided that the Secretary of State will have the power to request the CMA to investigate public interest issues alongside competition issues as this can put the competition regime at the heart of inquiries currently undertaken by ad hoc ‘commissions’. This approach is designed to enable faster implementation of competition remedies than an ad hoc inquiry. This will also bring the public interest markets regime in line with the public interest mergers regime where CC panels can be required to consider certain public interest issues alongside competition issues.
  • pg. 27 – The Secretary of State will have the power to request the CMA to investigate public interest issues alongside competition issues. 
  • pg 30 – CMA reports to Government on competition and public interest issues 

RELEVANT EXTRACTS IN FULL…

Summary of Responses
4.10
The Secretary of State currently has the power to ‘call in’ market inquiries that affect defined public interests. In these cases, the CC reports to the Secretary of State on its findings on the competition issue but does not consider the public interest. The Secretary of State must accept the CC’s competition findings but has the power to decide on remedies in light of his own views of the public interest. Opinion on proposals to enable the CMA to provide a report to Government on public interest issues alongside competition issues was divided. Some respondents were attracted to the proposal as it would enable the Secretary of State to consider recommendations from experts on the relevant public interest issue under consideration. Other respondents considered such powers could dilute the CMA’s primary competition function and politicise it. A minority of respondents argued that the CMA will lack the appropriate expertise.

The Government’s Decision
4.11
The Government has decided that the Secretary of State will have the power to request the CMA to investigate public interest issues alongside competition issues at phase 2. By utilising the expert competition knowledge of the CMA and supplementing this with specialist public interest expertise to consider, holistically, competition and public interest issues, the Government considers this can put the competition regime at the heart of market inquires currently undertaken by ad hoc ‘commissions’. This approach is designed to enable faster implementation of competition remedies than an ad hoc inquiry.

4.12
This will bring the public interest markets regime in line with the public interest mergers regime where CC panels can be required to consider certain public interest issues alongside competition issues. The merger regime does not provide for the appointment of further public interest experts for this purpose, but the Government considers that such experts may need to be appointed to advise on public interest matters in market investigations because the issues in these can be wider than in merger inquiries.

4.13
The Government is committed to preserving the independence of the CMA and wants to ensure that it retains a strong focus on competition. The Government believes that appropriate checks will preserve the independence of the CMA and guard against excessive use. Specifically:

  • The scope of public interest issues that may be considered in a markets case is not being widened by this reform. An affirmative Order from Parliament will be required to add a new public interest consideration to the current list (national security is currently the only public interest consideration specified in the markets regime).
  • As now, the competition test will need to be met for the CMA to be able to carry out a market investigation.
  • The role of the public interest experts will be limited to providing advice on the public interest issue under consideration.
  • The Secretary of State will retain his current decision-making role on remedies where he considers the public interest consideration affects these.

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