Proposal to continue Short form Opinions under new CMA regime welcomed

A new consultation by the CMA proposes to continue the pilot of the Short form Opinion (SfO) process introduced in 2010.   The consultation document reads:

4.1 In 2010, the OFT reviewed its approach to opinions under the Modernisation guideline (OFT442) in response to concerns raised by business and other stakeholders that some forms of beneficial collaboration were not proceeding for fear of infringing competition law.
4.2 Following this review, the OFT introduced a SfO process on a trial basis. SfOs were designed to provide guidance, within a prompt timetable, to businesses and their advisers on the application of competition law to prospective agreements between competitors raising novel or unresolved questions, the clarification of which would benefit a wider audience. The OFT’s trial SfO
process was only available for a limited number of cases per year in order to avoid a return to a notification regime.41

Proposed adoption and extension of the SfO process
4.3 The Transition Team has reviewed the OFT’s SfO trial as a part of the transition process and considers that SfOs should continue to be offered as a part of the CMA’s practical guidance and advocacy work. The Transition Team also considers that SfOs assist the future development of competition law and policy in the UK.
4.4 The Transition Team has therefore proposed that the CMA Board (once
established) should adopt the OFT’s SfO process on a trial basis, subject to
certain modifications described below, designed to extend the use of the tool
and clarify the process of requesting an SfO. There is no proposed end date
for the SfO trial. However, the CMA will review the SfO trial as appropriate.

Summary of proposed changes to the SfO process
4.5 The Transition Team proposes to clarify that businesses and their advisers as  well as government policy advisers are able to submit a request for an SfO, subject to their agreeing to comply with the CMA’s procedural requirements. The Transition Team also proposes to extend the scope of the SfO process to  cover not only prospective horizontal agreements between competitors but
also prospective vertical agreements between parties who do not compete with each other.
4.6 With regard to procedural enhancements, the Transition Team proposes that the CMA Board (once established) should adopt revised procedures in order to provide businesses and their advisers with greater clarity on the process for requesting and issuing an SfO. These will include setting out clearly the process of submitting a request for an SfO, how the CMA will prepare, issue
and publish an SfO, and how the CMA will treat information that it receives in the context of SfO enquiries or requests.
4.7 If the Transition Team’s proposal is accepted by the CMA Board, the revised or new procedures and practices will be set out in further detail closer to, or shortly after, 1 April 2014.
CONSULTATION QUESTION
Do you agree with the Transition Team’s proposal to extend the availability of SfOs to prospective vertical agreements in addition to prospective horizontal agreements? Please give reasons for your view.

Responses to cmaconsultation@bis.gsi.gov.uk by 5pm on 11th November.

Andrew Dakers, Founder, said:

“This news is welcome and I hope the start of a new conversation with the CMA around how the SfO process can be improved – as well as the wider guidance around when businesses should compete or collaborate to achieve responsible business outcomes.  The initial suggestions regarding opening up the SfO process are encouraging as well as the idea of broadening the process to include vertical agreements. However, there are additional barriers that need”

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