Formal authorisation option
Reintroducing an authorisation process for agreements: ‘Agreements and concerted practices – Understanding competition law’ (OFT, 2004) sets out the end of the previous UK exemptions process:
“Each individual exemption granted by the OFT prior to 1 May 2004 has been time limited. All such individual exemptions are valid until their expiry, although the OFT retains the power to cancel such exemptions. After expiry, individual exemptions will not be renewed.”
It has been suggested that a solution to business concerns might be that the Competition Act provides for a ‘public policy exclusion’. If there are ‘exceptional and compelling reasons of public policy’ the Secretary of State may make an Order to disapply the statutory prohibition. The present government has employed this extremely infrequently, for example, concerning agreements between companies involved in manufacturing and designing nuclear submarines. It is a matter of Government discretion what is considered “exceptional and compelling reasons of public policy”.
However our comparative research suggested that Australia, and to a lesser extent New Zealand, may offer an alternative model for a new exemption/ authorisation process in the UK, EU and further afield. In Australia, through the prior authorisation of voluntary agreements, businesses are given the comfort they need to collaborate when there is demonstrable public benefit. The “authorisation” process in Australian law removes the risk from a company perspective through prior due diligence and authorisation of voluntary agreements by competition authorities. The Portman Group Code of Practice was authorised through a similar process under the previous UK competition law framework – the Restrictive Trade Practices Act 1976.
We have considered whether the Australian system could be applied in the European context (as an enabler to Voluntary Agreements with more clout and a greater number of signatories). This would demand changes to the competition framework, but we have ruled these changes out as we think it would be better to review the impact of refinements to the current system and see whether this resolves the problems identified.