The Government yesterday announced that there will be a new body to oversee competition in UK markets, set up and in operation as early as 2014. The changes, announced yesterday, represent the biggest shake up in competition law for a generation.
The new body will be called the Competition and Markets Authority, and will subsume the role in competition currently played by the Office of Fair Trading and the entire Competition Commission.
The new body will look at all elements of competition law, including cartel enforcement and merger analysis, as well as undertaking analysis of markets to assess whether legislative changes could make them more competitive for consumers.
Observers were cautious in their commentary, with some wondering whether the new enlarged body would be better than the existing system, or whether it will be too big to function efficiently.
Rod Carlton is a partner at law firm Freshfields Bruckhaus Deringer.
"The proposals extend the regulatory net, but without giving enough corresponding certainty to business and CMA users," he said.
As well as altering the structure of the competition regulation bodies, the Government plans to make it easier for competition law prosecutors to bring cases against alleged cartels. Prosecutors will no longer have to prove that an accused acted dishonestly, simply that they were not open in their dealings.
Antonio Bavasso is a partner at another large city-law firm, Allen & Overy.
"It's very surprising that they went for that change. I don't think the failure of the OFT to bring successful criminal prosecutions has hinged on that aspect," he commented.
"It was, rather, down to the handling of the cases. This seems slightly off-target and premature," he added.
This change in the law brings cartel offences in line with other financial crimes, such as bribery and insider trading. However, observers have commented that the success of legal action will still depend on the quality of the lawyers employed by the new body rather than any tweaking of the law.
Read more on the story (Financial Times)
Mergers and competition law (FindLaw)