Defects and Effects—Competition Policy for the 1990s
| Published date | 01 July 1988 |
| DOI | http://doi.org/10.1111/j.1468-2230.1988.tb01769.x |
| Date | 01 July 1988 |
JULY 19881
DEFECTS
AND
EFFECTS-COMPETITION
POLICY
493
DEFECTS
AND
EFFECTS-COMPETITION POLICY
FOR
THE
1990s
THE
importance of an effective competition policy to the conduct
and performance of industry is beyond doubt; the Government has
long recognised this, and restated
its
position in the White Paper
which recently re-launched the image-conscious Department of
Trade and Industry (D.T.I.).’ In June 1986 the Government,
prompted by protracted criticism of United Kingdom competition
policy, announced a review of legislation controlling mergers and
restrictive trade practices. Previous criticism had already led to two
Green Papers,2 and a meagre statement on mergers policy by
Norman Tebbit, when Secretary of State for Trade and Ind~stry.~
The intensity of the present debate has been heightened by anxiety
over the conduct and implications of merger activity in the United
Kingdom and by a growing realisation that restrictive trade practices
policy is now largely ineffective. The renewed efforts of the
Member States of the Common Market to achieve a unified
internal market further legitimises the current proposals.
The current review has given rise to two reports, both conducted
by committees under the chairmanship of Hans Liesner
,
Deputy
Secretary and Chief Economic Adviser in the D.T.I. In relation to
mergers policy, where the suggested reforms are important but not
radical, the review committee has published a D.T.I. paper,
outlining proposed improvements to pr~cedure.~ The review of
restrictive trade practices policy, where fundamental changes are
proposed, was published in the form of a Green Papes (hereafter
referred to as “the Green Paper”) and a further period for
comments has been opened, which will last until the end of
September 1988. It is envisaged that a White Paper
will
be
published early in 1989,
so
that the earliest date for the introduction
of
legislation will be the 1989-90 Parliamentary session.
This note will first identify the defects of the present policy on
restrictive trade practices. The major proposals in the Green Paper
with regard to the substance of the proposed policy and the system
for its administration
will
then be examined and assessed.
DEFECTS
IN
THE
PRESENT SYSTEM
Restrictive trade practices policy is currently regulated by the
Restrictive Trade Practices Act 1976.6 This Act requires restrictive
trading agreements to be submitted to the Office of Fair Trading
’
D. T.I.-the department
for
Enterprise,
Cm.
278,
January
1988.
A Review
of
Monopolies and Mergers Policy,
Cmnd.
7198,
May
1978;
A Review
of
Restrictive Trade Practices Policy,
Cmnd.
7512,
March
1979
(“the
1979
Green Paper”).
Hansard, Written Answers
[213]
July
5,
1984.
Mergers Policy: A Department
of
Trade and Industry Paper on the policy and
procedures
of
merger control,
H.M.S.O.,
March
1988.
Review
of
Restrictive Trade Practices Policy,
Cm.
331,
March
1988.
As amended by the Competition Act
1980,
and supplemented by the Restrictive
Trade Practices Act
1977
and the Restrictive Practices Court Act
1976.
493
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