Monopolies And Mergers Commission
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The Competition Commission was a
non-departmental public body In the United Kingdom, non-departmental public body (NDPB) is a classification applied by the Cabinet Office, Treasury, the Scottish Government and the Northern Ireland Executive to public sector organisations that have a role in the process of n ...
responsible for investigating
merger Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
s, markets and other enquiries related to regulated industries under
competition law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
in the United Kingdom. It was a
competition regulator A competition regulator is the institution that oversees the functioning of the markets. And the Law in which it takes cognizance of situations having any type of impediments and distortions on the markets and correct them is the competition law ...
under the
Department for Business, Innovation and Skills , type = Department , logo = Department for Business, Innovation and Skills logo.svg , logo_width = 200px , logo_caption = , picture = File:Лондан. 2014. Жнівень 26.JPG , seal = , se ...
(BIS). It was tasked with ensuring healthy competition between companies in the UK for the ultimate benefit of consumers and the economy. The Competition Commission replaced the Monopolies and Mergers Commission on 1 April 1999. It was created by the
Competition Act 1998 The Competition Act 1998 is the current major source of competition law in the United Kingdom, along with the Enterprise Act 2002. The act provides an updated framework for identifying and dealing with restrictive business practices and abuse of ...
, although the majority of its powers were governed by the
Enterprise Act 2002 The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy. It made cartels illegal with a maximum pri ...
. The
Enterprise Act 2002 The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy. It made cartels illegal with a maximum pri ...
gave the Competition Commission wider powers and greater independence than the MMC had previously, so that it could make decisions on inquiries rather than giving recommendations to Government, and was also responsible for taking appropriate actions and measures (known as remedies) following inquiries which had identified competition problems. The Government was still able to intervene on mergers that involve a specified public interest criterion such as media plurality, national security and financial stability. On 1 April 2014 the Competition Commission was replaced by the
Competition and Markets Authority The Competition and Markets Authority (CMA) is the competition regulator in United Kingdom. It is a non-ministerial government department in the United Kingdom, responsible for strengthening business competition and preventing and reducing anti-com ...
(CMA), which also took over several responsibilities of the
Office of Fair Trading The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...
.


History

The Monopolies and Restrictive Practices Commission was set up on 1 January 1949, in response to the recommendations of several committees of inquiry into restrictive commercial activity. It was established under the
Monopolies and Restrictive Practices (Inquiry and Control) Act 1948 A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
. It was reconstituted as the Monopolies Commission on 31 October 1956 by the Restrictive Trade Practices Act 1955, which also set up a
Restrictive Practices Court The Restrictive Trade Practices Act 1956 was an act of the Parliament of the United Kingdom intended to enforce competition, and provide an appropriate check on restrictive combines and practices. It required that any agreement between companies ...
and a registrar of restrictive trading agreements. The commission was again reconstituted, and its powers extended, by the
Monopolies and Mergers Act 1965 A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...
. In 1969 oversight of the Commission passed to the Department of Employment and Productivity, and in 1970 to the Department of Trade and Industry. Under the
Fair Trading Act 1973 The Fair Trading Act 1973 is an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It mee ...
the Commission became, from 1 November 1973, the Monopolies and Mergers Commission, with wider powers to deal with references either from the
Office of Fair Trading The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...
or from the Department of Trade and Industry. On 1 April 1999, as a result of the
Competition Act 1998 The Competition Act 1998 is the current major source of competition law in the United Kingdom, along with the Enterprise Act 2002. The act provides an updated framework for identifying and dealing with restrictive business practices and abuse of ...
, it became the Competition Commission.


Role

The Competition Commission (CC) was an independent public body which conducts in-depth inquiries into mergers, markets and the regulation of the major regulated industries, ensuring healthy competition between companies in the UK for the benefit of companies, customers and the economy. All of the CC's inquiries were undertaken following a reference made by another authority, most often the
Office of Fair Trading The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...
(OFT) (which referred merger and market inquiries), or one of the sector regulators (which could refer markets within their sectoral jurisdictions or make regulatory references in relation to price controls and other licence modifications) or as a result of an appeal from a decision of one of the sector regulators.


Mergers

Under the
Enterprise Act 2002 The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy. It made cartels illegal with a maximum pri ...
(the Enterprise Act), the OFT could review mergers to investigate whether there was a realistic prospect that they would lead to a substantial lessening of competition (SLC), unless it obtained undertakings from the merging parties to address its concerns or the market was of insufficient importance. To qualify for investigation by the OFT, a merger needed to meet all three of the following criteria: # two or more enterprises must cease to be distinct; # the merger must not have taken place already, or must have taken place not more than four months ago; and # one of the following must be true: #* the business being taken over has a turnover in the UK of at least £70 million; or #* the combined businesses supply (or acquire) at least 25 per cent of a particular product or service in the UK (or in a substantial part of the UK), and the merger results in an increase in the share of supply or consumption. In exceptional cases where public interest issues are raised, the Secretary of State could also refer mergers to the CC. Where an inquiry was referred to the CC for in-depth investigation, the CC had wide-ranging powers to remedy any competition concerns, including preventing a merger from going ahead. It could also require a company to sell off part of its business or take other steps to improve competition.


Market investigations

The
Enterprise Act 2002 The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy. It made cartels illegal with a maximum pri ...
enabled the OFT (and the sector regulators) to investigate markets and, if they were concerned that there may be competition problems, to refer those markets to the CC for in-depth investigation. In market investigations the CC had to decide whether any feature or combination of features in a market prevents, restricts or distorts competition, thus constituting an adverse effect on competition (AEC). Before finding out what percentage firms take up, the CC has to 'define the market'. This is when they have to find out which products are in which industries so they know what percentage to do. If the CC concluded that this was the case, it was required to seek to remedy the problems that it identified either by introducing remedies itself or by recommending action by others.


Reviews of undertakings or orders

Undertakings or orders are the primary means by which remedies were given effect under the
Enterprise Act 2002 The Enterprise Act 2002 is an Act of the Parliament of the United Kingdom which made major changes to UK competition law with respect to mergers and also changed the law governing insolvency bankruptcy. It made cartels illegal with a maximum pri ...
and the
Fair Trading Act 1973 The Fair Trading Act 1973 is an Act of the Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It mee ...
. The OFT had the statutory duty to keep these undertakings or orders under review and if it considered that due to a change of circumstances a set of undertakings or an order should be varied or terminated, then the OFT referred it for consideration by the CC. Responsibility for deciding on variation or termination of undertakings lay with the CC.


Regulatory references

In relation to regulatory references, the CC's role was dictated by the relevant sector-specific legislation. Companies regulated under the gas, electricity, water and sewerage, postal services, railways or airports legislation generally had a formal instrument (a licence) setting out the terms of their operation. If a regulated company did not agree to a modification of its licence proposed by the regulator, the regulator was required to refer the question to the CC. The CC then considered whether any matter referred to in the reference could be expected to operate against the public interest and, if so, whether it could be remedied by modifications to the licence. These references could involve the price control applied to the company. The CC also had roles under the
Financial Services and Markets Act 2000 The Financial Services and Markets Act 2000c 8 is an Act of the Parliament of the United Kingdom that created the Financial Services Authority (FSA) as a regulator for insurance, investment business and banking, and the Financial Ombudsman Serv ...
and the
Legal Services Act 2007 The Legal Services Act 2007 is an Act of the Parliament of the United Kingdom that seeks to liberalise and regulate the market for legal services in England and Wales, to encourage more competition and to provide a new route for consumer complai ...
.


Energy code modifications and Communications Act appeals

The CC had an appeal function following decisions by the
Gas and Electricity Markets Authority , type = Non-ministerial government department , nativename = , nativename_a = , nativename_r = , logo = Ofgem logo.svg , logo_width = 124px , logo_caption = , seal = , seal_width = , seal_caption = , picture = , picture_widt ...
to modify certain energy codes under the
Energy Act 2004 The Energy Act 2004 (c 20) is an Act of the Parliament of the United Kingdom concerned with nuclear power, renewable and sustainable energy and energy regulation. Royal assent was granted on 22 July 2004. Part 1 Chapter 1 Section 10 Section 10 ...
and in relation to price control decisions by
Ofcom The Office of Communications, commonly known as Ofcom, is the government-approved regulatory and competition authority for the broadcasting, telecommunications and postal industries of the United Kingdom. Ofcom has wide-ranging powers acros ...
, following a reference by the
Competition Appeal Tribunal The Competition Appeal Tribunal (CAT) of the United Kingdom was created by Section 12 and Schedule 2 to the Enterprise Act 2002 which came into force on 1 April 2003. The Competition Service is an executive non-departmental public body which ...
(CAT) under the
Communications Act 2003 The Communications Act 2003 is an Act of the Parliament of the United Kingdom. The act, which came into force on 25 July 2003, superseded the Telecommunications Act 1984. The new act was the responsibility of Culture Secretary Tessa Jowell. It ...
.


See also

*
Competition law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
*
Competition regulator A competition regulator is the institution that oversees the functioning of the markets. And the Law in which it takes cognizance of situations having any type of impediments and distortions on the markets and correct them is the competition law ...
*
Department for Business, Innovation and Skills , type = Department , logo = Department for Business, Innovation and Skills logo.svg , logo_width = 200px , logo_caption = , picture = File:Лондан. 2014. Жнівень 26.JPG , seal = , se ...
*
History of competition law The history of competition law refers to attempts by governments to regulate competitive markets for goods and services, leading up to the modern competition or antitrust laws around the world today. The earliest records traces back to the efforts ...


References


External links

*
bis.gov.uk

Competition Commission market investigation – Payment protection insurance (PPI)Competition Commission market investigation – the supply of airport services in the UK by BAA

internationalcompetitionnetwork.org
{{Authority control Corporate governance in the United Kingdom Consumer organisations in the United Kingdom Competition regulators Defunct non-departmental public bodies of the United Kingdom government Department for Business, Innovation and Skills 1999 establishments in the United Kingdom 2014 disestablishments in the United Kingdom