Further reforms proposed to "strengthen and streamline" the UK's new competition law regime

The new regime is intended to fully come into effect alongside the launch of the new Competition and Markets Authority next April. The second set of draft regulations complement an initial set, published by the Government in July, on which consultation has just ended.

The CMA Transition Team has also published, for consultation, a second tranche of guidance documents setting out how the new competition authority intends to perform its work under the new regime. The guidance cover the CMA's approach to consumer protection, investigation procedures, prosecution guidance for the new criminal cartel offence and the concurrent application of competition law to regulated industries, amongst other issues. The CMA will be legally established on 1 October 2013 and become fully operational on 1 April 2014.

Competition law expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said that the announcements were the latest to signify that the CMA will be "an effective and increasingly proactive body".

The CMA will combine the work of the existing Competition Commission (CC) with the competition and certain consumer functions of the Office of Fair Trading (OFT) to form a single regulator, responsible for promoting competition across the economy for the benefit of consumers. It will have stronger and more robust powers to investigate markets that are not working well. Further changes to competition law set out in the Enterprise and Regulatory Reform Act will make it easier to prosecute those involved in criminal cartels and streamline the merger process.

Under the new competition law regime, the Competition Appeal Tribunal (CAT) is given the power to issue warrants to allow CMA officials to enter premises to obtain access to documents as part of an investigation - such powers currently only apply to the High Court and the Court of Session. The government is consulting on draft procedural rules that would bring these new powers into force. These new powers are designed to help streamline civil and criminal procedures for dealing with antitrust and cartel cases..

Other provisions in the draft secondary legislation subject to the consultation would make the CMA responsible for coordinating the use of powers set out in the Competition Act between itself and the economic regulators, such as energy regulator Ofgem and Ofcom in the telecommunications market. Further provisions also set out the circumstances in which companies or individuals would fall outside of the new criminal cartel regime through the publication or disclosure to customers of "relevant information" about arrangements which would otherwise amount to participation in a criminal cartel. Under the new regime, as established by the Enterprise and Regulatory Reform Act, it will no longer be necessary to prove 'dishonesty' before prosecuting someone for participation in an illegal cartel.

"It is vital for the UK's competition regime to be both strong and streamlined, protecting customers and businesses alike from unfair practices," said Competition Minister Jo Swinson. "These measures are part of wide-reaching reforms to improve the UK competition regime, making sure the new CMA has the tools in place to operate efficiently and effectively from day one."

Alongside its reforms to competition law and enforcement more generally, the Government has proposed making it easier for businesses and consumers to seek compensation for losses incurred as a result of anti-competitive behaviour without resorting to full legal proceedings or relying on the competition authorities to investigate. Under the current rules Which? is the only entity allowed to bring a collective damages action before the CAT on behalf of consumers and the represented group must be made up of only those consumers who have actively signed up, or 'opted-in', to the collective action. The forthcoming Consumer Rights Bill, published in draft for consultation and pre-legislative scrutiny in June, would instead allow a much broader range of representative organisations to bring actions on behalf of consumers and UK-based businesses before the CAT. Also, representative organisations will be able to ask the CAT to deem them to be bringing a claim on behalf of all customers who might have been affected by the competition law breach, unless such customers 'opt-out'.

The OFT published its response to this consultation (58-page / 626KB PDF) earlier this week. It reiterated its "strong support" for reform to the private action regime, and said that switching from 'opt-in' to 'opt-out' collective damages actions as proposed by the Government was "likely to bring significant benefits for businesses and consumers" in well-founded claims. However, it questioned the need to restrict such cases to the CAT, saying that "the removal of such restrictions might help encourage meritorious opt-out actions".

"However, overall, we recognise government's desire to do its utmost to minimise the risks [of abusive litigation or unfair additional costs to businesses] which still increasing access to justice," it said in its response. "On balance, therefore, we consider that the government proposals are in broadly the right place and should significantly guard against the risk of abusive litigation while increasing access to justice for those who have suffered harm."