Evolution of the Framework of Uk Competition Policy

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Date Submitted: 10/14/2010 12:03 AM

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The UK was the first West European country to introduce competition legislation at the end of the Second World War. The 1948 Monopolies and Restrictive Practices Control and Enquiry Act was the first to enshrine the ‘public interest’ principle, and to establish that investigations into competition cases would be undertaken administratively on a case-by-case basis in line with British cultural preferences for non-adversarial approaches to regulation. However, it was the legislation of the 1950s and 1960s that really established the framework of competition policy. The policy developed both in form and scope so that it embraced both judicial and administrative procedures and covered restrictive agreements, single firm monopolies, “complex monopolies”, anticompetitive practices and mergers. The evolution of modern UK competition policy remained ongoing by some key legislation.

The 1973 Fair Trading Act extended previous legislation concerning monopolies and mergers and strengthened the administrative framework by establishing the office of Fair Trading (OFT), which has the task of monitoring competition. The OFT is under the leadership of the Director-General of Fair Trading (DGFT), who has the legal power to refer any cases of anti-competitive behaviour to the Monopolies and Mergers Commission (MMC). Such anti-competitive behaviour concerns cases which involve the exploitation of a “monopoly situation” which exists in relation to the acquisition or supply of goods within the UK. The task of MMC is to report on whether a monopoly situation exists referring to the monopoly definition and on whether it operates against public interests. The monopoly is defined to exist where a firm has greater than 25% market share. The public interest is determined by five criteria: 1.maintaining and promoting effective competition between persons supplying goods and services in UK;

2. promoting the interests of consumers, purchasers, and other uses of goods and services in the UK...