The importance of competition policy
An Office of Fair Trading case study

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Page 3: Who is responsible for UK competition law?

Enforcement of the law generally falls into the following stages:

  • investigation;
  • judging the merits of the case;
  • recommending suitable remedies;
  • deciding whether to implement the remedies; and
  • monitoring those remedies which are implemented.

Four principal bodies have interlocking responsibilities for enforcement.

  • The Director General of Fair Trading is the independent head of the Office of Fair Trading (OFT), a non-ministerial government department concerned with competition issues. The Director General undertakes all initial investigations. If he has reason to believe that a competition problem exists, he may, either informally or formally (on behalf of the Secretary of State for Trade and Industry), seek to remedy it with the parties concerned. If that is not possible, he usually refers the matter for follow-up investigation by the Monopolies and Mergers Commission or action by the Restrictive Practices Court. For example, if, after his initial investigation into a merger, the Director General feels further action is required he will advise the Secretary of State either to accept undertakings or to make a reference to the Monopolies and Mergers Commission. The Director General has sole responsibility for monitoring any remedies.
  • The Monopolies and Mergers Commission (MMC) is an independent tribunal that carries out investigations under the Fair Trading Act and Competition Act at the request of the Secretary of State or the Director General. It reports its findings and, if appropriate, recommends remedies to the Secretary of State.
  • The Restrictive Practices Court (the Court) decides whether the restrictions in a registrable agreement are against the public interest. If the Court believes this is the case, it can strike down the restrictions. The Court can only act on agreements referred to it by the Director General.
  • The Secretary of State for Trade and Industry does not have an investigatory role. He is mainly concerned with the final decision about whether enforcement action should be taken and what remedies should be implemented after investigations by the other bodies are completed. Agreement has to be reached on, for example, whether a particular merger should be referred to the MMC, and if so, whether it should be prohibited because it is against the public interest or allowed to go ahead on certain conditions.

The Secretary of State is the voice of competition policy in the Cabinet and has responsibility for appointing the Director General of Fair Trading and the members of the MMC.

Office of Fair Trading | The importance of competition policy