Recasting Competition Concurrency under the Enterprise and Regulatory Reform Act 2013
| Published date | 01 March 2014 |
| DOI | http://doi.org/10.1111/1468-2230.12065 |
| Author | Niamh Dunne |
| Date | 01 March 2014 |
LEGISLATION
Recasting Competition Concurrency under the Enterprise
and Regulatory Reform Act 2013
Niamh Dunne*
The concurrent enforcement power granted to certain sector economic regulators is one of the
more remarkable features of UK competition law. In practice, regulators have tended to under-
enforce their competition powers, preferring to resolve market difficulties through regulatory
interventions. Recent amendments to the concurrency framework, introduced by sections 51 to
53 of the Enterprise and Regulatory Reform Act 2013, seek both to strengthen the priority of
competition enforcement and to provide plausible sanctions – including, ultimately, the removal
of competition jurisdiction from regulators – for continued underuse. This article assesses these
reforms in light of the history and (limited) application of the concurrent competition powers of
regulators to date. It argues that the absence of an overarching policy rationale for this curious
example of UK antitrust ‘exceptionalism’ complicates the determination of whether the reforms,
which ostensibly seek to reinforce but potentially also undermine concurrency, are likely to have
a positive market impact in practice.
INTRODUCTION
Addressing an eclectic miscellany of contemporary issues within regulation, the
Enterprise and Regulatory Reform Act 2013 (ERRA) appears to offer some-
thing for everyone: from, inter alia, the establishment of a ‘Green Investment
Bank’, to modification of the rules relating to employment tribunals, civil
liability for health and safety, copyright, directors’ pay and listed buildings. In
addition, the ERRA introduces a significant number of changes, both major and
minor, into the UK’s competition law framework. The headline competition
reforms – the amalgamation of the Office of Fair Trading (OFT) and the
Competition Commission (CC) to create a new ‘Competition and Markets
Authority’ (CMA),1plus removal of the requirement to establish Ghosh2dis-
honesty from the criminal cartel offence3– are well documented.4Nestled
*Fellow in Law, Fitzwilliam College, Cambridge, and Affiliated Lecturer, University of Cambridge.
Many thanks to the anonymous referees for their helpful comments on an earlier draft. Some
preliminary research for the article was conducted during a research stay at the Max Planck Institute for
Comparative and International Private Law, Hamburg, the support of which is acknowledged with
gratitude.
1 Enterprise and Regulatory Reform Act 2013, ss 25–28.
2RvGhosh [1982] EWCA Crim 2.
3 Enterprise and Regulatory Reform Act 2013, s 47.
4 On the cartels reforms, see, eg, S. Summers, ‘What Should the Dishonesty Element of the UK
Cartel Offence be Replaced With?’ [2012] Competition Law Journal 53; A. Bailin, ‘Doing Away
with Dishonesty’ [2011] Competition Law Journal 179; B. Wardhaugh, ‘Closing the Deterrence
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© 2014 The Author. The Modern Law Review © 2014 The Modern Law Review Limited. (2014) 77(2) MLR 254–276
Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
amongst the more mundane amendments in Part 4 of the ERRA, however, are
a series of provisions that are intended to strengthen, but also to temper, the UK’s
unusual system of competition concurrency in regulated sectors. Whilst, at
first glance, the changes introduced by sections 51 to 53 of the ERRA appear
technical and even abstruse in nature, in actuality the question of concurrency
relates to issues at the heart of the existing framework for State supervision of
regulated markets. This article aims to explore the purported reforms of the
concurrency framework introduced by the ERRA, to assess their potential for
success in practice, and, more generally, to examine the efficacy of the concur-
rent powers regime.
Broadly speaking, ‘concurrency’ implies a scheme of parallel jurisdiction for
the enforcement of UK and EU competition law by the OFT (now CMA) and
various designated sectoral economic regulators within their respective spheres of
control.5The term concurrency might be seen as slightly misleading, insofar as
there is no overlapping jurisdiction at issue: only one agency may apply the
competition rules in a given instance.6In practice, under the UK’s system of
shared competition jurisdiction, the OFT has tended to defer to sector regulators
within their respective spheres of control, while the latter have generally
favoured the application of regulatory rather than antitrust remedies. The
end result has been a perceived under-enforcement of competition law within
regulated markets.
The ERRA attempts to address these deficiencies through a ‘carrot and stick’
approach, in order to both encourage and compel greater use of competition
enforcement powers by sector regulators. At least implicitly, moreover, the
legislation is intended to rebalance the relationship between regulators and the
new CMA, providing the latter with an enhanced leadership role and greater
priority with respect to competition enforcement even within regulated markets.
Perhaps most notably, the ERRA also provides a ‘nuclear option’7for concur-
rency, which enables the Secretary of State unilaterally to remove concurrent
enforcement powers from a given regulator by statutory instrument. This late
Gap: Individual Liability, the Cartel Offence and the BIS Consultation’ [2011] Competition Law
Journal 175; and P. Whelan, ‘Improving Criminal Cartel Enforcement in the UK: The Case for
the Adoption of BIS’s “Option 4”’ (2012) 8 European Competition Journal 589. On amalgamation,
see, eg, J. Lever, ‘Fusion of the OFT and the CC: Ask for the Evidence’ [2011] Competition Law
Journal 126; J. Aitken and A. Jones, ‘Reforming a World Class Competition Regime: the
Government’s Proposal for the Creation of a Single Competition and Markets Authority’ [2011]
Competition Law Journal 97; and C. Graham, ‘The Reform of UK Competition Policy’ (2012) 8
European Competition Journal 539.
5 This contrasts with another so-called concurrency question within contemporary competition
law, namely the appropriateness of the ex post application of competition law to market behaviour
that is already subject to a substantial degree of ex ante economic regulation. Compare, eg, the
highly permissive approach of the Court of Justice of the European Union (CJEU) in Case
C-280/08 P Deutsche Telekom AG vCommission [2010] ECR I-9555 with the considerably more
restrictive holding of the US Supreme Court in Verizon Communications, Inc vLaw Office of Curtis
V. Trinko 540 US 398 (2004).
6 See V. Smith, ‘Competition Concurrency between the OFT and Sector Regulators’ (2004) 12
Utilities Policy 61, 61.
7 So described by Lord Whitty during House of Lords committee stage debate about the Bill: see
HL Grand Committee col 512 18 December 2012.
Niamh Dunne
© 2014 The Author. The Modern Law Review © 2014 The Modern Law Review Limited. 255(2014) 77(2) MLR 254–276
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