Competition Commission

Competition Commission, formerly Monopolies and Mergers Commission, body in Britain charged with investigating and reporting on monopolies and monopolistic conditions in business. It was established in 1948 with a somewhat different remit, and many of its current responsibilities and procedures are contained in the 1973 Fair Trading Act; others are contained in the 1980 Competition Act, the privatization statutes relating to such industries as gas and water, the 1990 Broadcasting Act, and the 1998 Competition Act. It was under the terms of the latter act that the Competition Commission replaced the Monopolies and Mergers Commission in 1999. It is funded by the Department of Trade and Industry (DTI) but is independent of government. The Commission comprises an appeals panel, whose 20 members are appointed by the secretary of state for trade and industry; a reporting panel, which investigates matters referred to it; and various specialist panels for electricity, telecommunications, water, and newspapers. Its members include business people, lawyers, academics, and trade unionists. The Commission has no power to initiate its own investigations. References (requests for an inquiry) are made to it by the minister in charge of the DTI, the Director General of Fair Trading, or the appropriate regulator.

The areas which the Commission may be asked to investigate include: monopolies, mergers, anti-competitive practices of individual bodies, the efficiency of certain public sector bodies, and the charges levied by privatized utilities such as telecommunications or electricity. The Commission's task is to determine whether the public interest may be adversely affected. In doing so it takes into account all matters relevant in the circumstances of a particular reference, including the desirability of promoting effective competition in the United Kingdom; the interest of consumers in respect of quality and choice; efficiency and innovation; facilitating market entry; the balanced distribution of industry and employment; and the internal competitiveness of British companies. Under the 1973 Fair Trading Act a monopoly is a situation where at least 25 per cent of a particular good or service is supplied by a single entity (or group of interconnected entities) or a situation where 25 per cent of the market is supplied by a (not interconnected) group of entities which conduct their affairs in a way that distorts competition.

Merger references are made if there is a fear of a monopoly being created or if the gross value of worldwide assets taken over exceed £70 million. Merger inquiries usually take three months, though newspaper mergers are usually reported upon within two months. Other inquiries take up to a year. The minister or regulator is not bound by the Commission's verdicts.