The Office of Fair Trading and the Competition Commission will be merged under Government plans to create a single body responsible for competition.
In a consultation paper published last week, the Department for Business, Innovation & Skills says the new Competition and Markets Authority will reduce the duplication of costs and will increase industry confidence in the system.
The aim is to make it easier for the new body to tackle anti-competitive mergers, deliver faster results for consumers and reduce the burden on small and medium-sized businesses.
Minister for employment relations, consumer and postal affairs Edward Davey says: “We need to have a strong regime to promote effective competition in markets. This is an excellent opportunity to strengthen and streamline the competition regime to deliver better outcomes for consumers and increase business confidence and certainty.”
The Government may reform the competition regime’s funding. Merger fees currently fall into three fee bands, depend- ing on annual UK turnover of the business being acquired. It is considering increasing fees across the three existing fee bands, or creating an addit- ional higher fee band for turn-over exceeding £120m.
A proposal to make it mand- atory for firms to notify the CMA ahead of proposed mergers has sparked concern among law firms. Firms currently operate under a voluntary merger notification scheme.
Speechly Bircham head of EU and competition Robert Bell, who is also London Law Society Competition Committee chairman, says: “The mandatory options proposed in the consultation will only serve to drive up business costs and increase the regulatory scrutiny of many mergers which have little or no anti-competitive effect.”
Ashurst competition partner Duncan Liddell says: “There are a number of revolutionary proposals including mandatory notification of mergers and very considerable increases in fees for competition investigations.
“Businesses will welcome quicker decision-making but will be more concerned about the increasing costs of inves- tigations and the greater risk of criminal sanctions.”