La Revue Squire

Competition Authorities in the UK and France


Rédigé par Olivia King le 5 Juin 2014


UK

The new UK competition regulator, the Competition and Markets Authority (CMA) became fully operational in the UK on 1 April 2014. It combined the Competition Commission (CC) with the Office of Fair Trading (OFT), and created a single integrated competition authority in the UK. The CMA was created to ensure a more proactive approach to competition law was adopted in the UK. It is expected that increased resources will ensure increased activity, tougher sanctions against businesses and individuals and robust decision-making.

Background

The UK government reviewed the UK competition regime in 2011,[1] and was concerned that competition cases were taking too long between the existing competition regulators, the Office of Fair Trading and the Competition Commission. In March 2012 the UK Government’s Department for Business, Innovation and Skills (BIS),[2] proposed that the CC and the OFT should be merged in order to strengthen and provide a more efficient competition regime in the UK. These proposals were later enacted upon in the competition provisions of the Enterprise and Regulatory Reform Act 2013,[3] which came into force on 1 April 2014 and created the Competition and Markets Authority.

Key Changes

Mergers and Acquisitions - The CMA retains the two phase approach used by the OFT, with Phase I decisions being the responsibility of the CMA Board and Phase II decisions taken by an independent panel of experts. There are also new statutory time limits for merger reviews, which include a 40 day working time limit for Phase I decisions, a time limit for parties to offer undertakings after the Phase I decision, and a 12 week period after the Phase II decisions for remedies to be implemented.

Competition Act 1998 – The CMA has the power to enforce prohibitions on anti-competitive agreements and abuses of dominant positions, set out in the Competition Act 1998.[4] The CMA has adopted the model used by the OFT, revisions include having separate decisions makers at the provisional and final decisions stages, as well as establishing a procedural adjudicator to deal with procedural issues during the case.

Cartel Offence – The removal of ‘dishonesty’ from the criminal cartel offence, Section 188 Enterprise Act 2002,[5] has caused concerns that the scope of this offence may in fact criminalize legitimate conduct.

Market investigations – The CMA has new power to investigate practices across markets and the Secretary of State has wider powers to intervene on public interest grounds. The new statutory deadlines for investigations are for Phase I decisions to be taken within 12 months and Phase II within 18 months. The CMA will also have enhanced powers to ask questions to individuals who have a connection with a business.



FRANCE

The French Competition Authority, L’Autorité de la concurrence, is an independent administrative authority, specializing in the control of anti-competitive practice, expertise of the functioning of markets and the control of mergers. Its aim is to ensure a free market and assist the competitive functioning of markets. The <<Autorité de la concurrence>> has both an adjudicative and advisory function, and acts on its own initiative or at the request of complainants as soon as competition is distorted in the market. The authority may impose emergency measures, injunctions and financial penalties.

Mergers and Acquisitions
Companies must notify the French Competition Authority, Autorité de la concurrence, of any mergers and acquisitions pursuant to Article L. 430-5 of the French Commercial Code, Code de commerce[6]The French authority then carries out a detailed examination of the proposed merger, and assesses whether, in a case where there is serious doubt of harm to competition, the transaction brings economic progress sufficient to offset any harm to competition, pursuant to Article L. 430-6. Article L.430-7 gives the Minister the power to refer the case, once the authority has made its final decision.

Cartel Offence
Article L420-1 of the French Commercial Code prohibits direct or indirect activity which has the effect of preventing, restricting or distorting competition in the market, concerted actions, express or implied agreements where access to the market is restricted, artificially increase or decrease prices to hinder a free market, limit of control production and divide markets.
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Although differences can be identified in the specific details of how each authority carries out their investigations, the principle aim of the two jurisdictions is the same; the prevention of anti-competitive behaviour in order to ensure a free market. It is evident that more powers and resources have been granted to the CMA in the UK, but just how effective the new system will be for robust decision making and proactive investigations will only become apparent in practice.
 





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