UK: OFT/CC Reforms -Throwing the Baby Out With the Bathwater?

Last Updated: 21 March 2012
Article by Gillian Sproul and Kiran S. Desai

Previously published on 20 March 2012.

Keywords: OFT, CC reforms, Competition and Markets Authority, CMA

One year after opening a consultation on merging the two UK competition authorities, the British Government announced on 15 March 2012 its response.1 The centrepiece of these reforms will be the creation of a unified Competition and Markets Authority ('CMA') by April 2014 on a statutory footing. The Government's proposals are designed to streamline the decision-making process and increase efficiency. Whether these changes will result in throwing the proverbial 'baby out with the bathwater' remains to be seen.

Background: UK Alphabet Soup

Unlike the unified European Commission, the UK adopted a multi-layered structure to enforce its competition regime. The Office of Fair Trading ('OFT') is the primary enforcement authority for both merger control and behavioural matters such as price-fixing cartels. On the mergers side, the OFT conducts a 'Phase I' review of a merger: only where it believes a substantial lessening of competition may arise will it refer a merger to the Competition Commission ('CC') for a further 'Phase II' review. Each public body is independent with separate staffs, budgets and premises. On the behavioural side, the OFT investigates breaches of the prohibitions on anti-competitive agreements and abuses of market dominance, and it also conducts market studies. The CC has no role in investigating breaches of the prohibitions and it may investigate a market only where the OFT has referred that market to it for in-depth review. Sectoral regulators (e.g. OFCOM, OFWAT, OFGEM) have the same powers as the OFT in their sectors, which they exercise concurrently with the OFT, and they may also refer cases to the CC. A specialist Competition Appeals Tribunal ('CAT') may hear appeals from OFT or CC decisions.

With so many different pairs of eyes scrutinising UK competition enforcement, substantial checks and balances have been built into the system. International observers have reported a high regard for the UK system. The CC has stated that "in Global Competition Review's annual survey of the world's competition regimes, the CC has topped the table for the last five years." The British Government will no doubt want to maintain the same high marks whilst achieving its domestic objectives. The proposals discussed below go some way to that end, though the detailed implementation process remains to be seen.

Proposals and Commentary


  • Voluntary: The UK will retain its unusual voluntary merger control regime, together with its current jurisdictional thresholds (25% 'share of supply' / target's turnover exceeding £70m). This followed extensive discussion about making merger notifications mandatory where the thresholds are met, as the European Commission requires. Retaining the current system will arguably preserve the UK's flexible approach and ability to target problematic cases, rather than generating excessive, 'technical' filings. However, the UK regime will be one of a very small number of voluntary regimes.
  • More Expensive: Despite business lobbying hard against making the system more expensive, the UK Government will increase the OFT's merger fees from 6 October 2012, so that the merger control system achieves 60% cost recovery. There will be no cost recovery for behavioural cases.

  • 'Unscrambling Eggs': This is a consequence of retaining a voluntary merger regime where parties can close transactions before receiving clearance. The CMA will have stronger powers to block pre-emptive action by companies seeking to integrate their operations, once the CMA starts to investigate a merger that has not been pre-cleared. These will include financial penalties.
  • Timelines: businesses should benefit from clearer administrative timelines. The CMA will have a 40 working day statutory timeline in Phase I cases, mirroring the OFT's informal practice to date. There will be a new procedure and timeline to negotiate undertakings in lieu of a Phase II reference, plus a new time limit to impose remedies in Phase II cases. This may help to speed up the review process, although the maximum 24 week length of Phase II investigations remains the same, to maintain the quality and robustness of decisions. Even now, many Phase II investigations are already completed in less than the allotted time, especially those resulting in clearances.


  • Back to the Future? The most striking reform is re-writing the cartel offence in the Enterprise Act 2002 by deleting the 'dishonesty' element. To undermine the most damaging secret arrangements between conspirators, the offence will no longer include those cartels which the parties have agreed to publish in a suitable format (e.g. in the London Gazette) before they are implemented, so that customers and others are aware of them. The official explanation is that 'dishonesty' offences are particularly difficult to prosecute in a white collar criminal environment and the reform will increase the number of prosecutions. However, publishing restrictive arrangements may take the law back to the era of the Restrictive Trade Practices Act 1976, before the modernisation of UK law with the Competition Act 1998. In addition, the European Commission ended the notification of restrictive agreements in 2004, encouraging parties to self-assess with their legal advisors. The question is therefore whether this will unduly overburden the CMA's resources.
  • Accelerating Administrative Inquiries: the CMA will take over the OFT's role in carrying out the administrative enforcement of antitrust investigations. Its rules will see the process accelerated and decision-making made more robust, e.g. by separating investigations from decisions. In the meantime the OFT will begin consulting on improving its own procedures, after a mixed record of investigations in 2010 / 11.


  • Wide-ranging: In a similar way to the European Commission's sector inquiries, the CMA will have the power to range across industries and markets to identify competition issues and make recommendations. The Secretary of State (currently Dr Vince Cable) will be able to request the CMA investigate certain 'public interest' concerns as well as competition issues.
  • Quicker: To date the OFT has carried out market studies and the CC market investigations (of up to two years). Phase I market studies will now have a statutory timetable and Phase II market investigations will be shortened to 18 months. There will be new time limits to impose Phase II remedies in market investigations. These are designed to reduce the burden on parties in terms of expense and management time. This follows a number of particularly onerous, long-running cases and should lead to swifter outcomes.


  • Clarity: The sectoral regulators (see above) will remain in a system of concurrent enforcement. The new legislation will strengthen the place of competition law over other sectoral legislation and boost the co-operation between the CMA and its counterparts. This is aimed at making more transparent the 'alphabet soup' mentioned above.


  • CAT: Aggrieved parties may still make 'merits based' appeals to the CAT against the CMA's decisions. The CAT will have to take into account statutory guidance on penalties. The general policy aim is that financial penalties should reflect the 'seriousness of the infringement' and the 'need' for deterrence.


The leadership of the CMA is still to be determined. However, in February 2012 OFT chief executive John Fingleton announced his resignation after seven years at the OFT. Mr Fingleton said in a statement that "as the government moves closer to a decision on the future structure of the regime, this is a good time for someone new to take the helm at the OFT and steer the competition and consumer regime into the future." He will depart later in 2012.

CMA Status

The British Government has said that the CMA will be an independent Non Ministerial Department ('NMD'), free from ministerial influence. To ensure transparent decision making and sound accountability, the CMA's Chief Executive and Board will be accountable directly to Parliament. The CMA will be required to consult on its planned work and set out at the end of the year how it has performed. The British Government is still to clarify the scope of the CMA with regards to its consumer functions.


1 Please see the full set of materials at . The CC's statement is at The OFT's statement is at

2 The OFT/CC Reforms - Throwing The Baby Out With The Bathwater?

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2012. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.