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Out With The Old, In With The New: The Office of Fair Trading Gets Replaced

On 01 April 2014 the Enterprise and Regulatory Reform Act 2013 abolishes the OFT and the Competition Commission in favour of a new body the Competition and Markets Authority (CMA). This brings under one roof two similar functions formerly carried out by different agencies and should meet the government’s aim for better performance and a more robust consumer protection system.

This streamlining is one of the main features of the new UK competition reforms brought in by this act, which will also implement certain key changes to the application of both rules and procedure. There are also changes to the cartel offence and merger control which will affect businesses with dominant market positions.

The CMA will have wide ranging powers, including the unfair consumer terms enforcement powers that the OFT has exercised up until now, although these have largely been transferred to Trading Standards Services. The CMA will be responsible for the investigation of infringements of the Competition Act 1998, merger control reviews and market investigations and for bringing criminal proceedings against individuals in respect of the cartel offence.

They have published guidance on their, which will apply to all ongoing and future consumer enforcement actions from that date. The CMA has also adopted a number of the consumer law guides published by the OFT over the last 13 years.

In recent years the OFT has lagged behind other European national competition authorities, with cumbersome and lengthy investigative processes. It is hoped that the CMA can be a more powerful advocate for competition and consumer protection.

The statements from the CMA certainly sound robust as they talk of “vigorous enforcement” and a “more targeted approach” But whether this will really benefit business and the consumer remains to be seen.

The advent of the CMA is a significant change for the UK competition landscape, representing a shift towards more targeted and robust enforcement. To that end, all businesses should ensure that they are competition law compliant and have effective risk management policies in place.

Written By: Iain Boyle

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