GREETINGS TO CHARTERED ACCOUNTANTS FOR ICAIS POST QUALIFICATION COURSE VIDEO CONFERENCE FROM HYDERABAD 26 AUGUST 2005

Copyright - Dr. S. Chakravarthy2 COMPETITION REGIME IN THE UNITED KINGDOM PRESENTATION BY Dr.S.CHAKRAVARTHY (Profession : Civil Servant) Member, High Level Committee on Competition Policy and Law And Member of Committee for Drafting the Law. PRESENTLY, ADVISER/CONSULTANT ON COMPETITION POLICY AND LAW HYDERABAD, INDIA

Copyright - Dr. S. Chakravarthy3 UK COMPETITION ACT 1998 | | THECOMPETITION ACT, 1998 OF UK WAS BROUGHT INTO FORCE ON 1 MARCH 2000 | IT IS IN TUNE WITH ARTICLES 81 & 82 OF THE TREATY OF ROME | IT HAS REPLACED THE RESTRICTIVE TRADE PRACTICES ACT, 1976 AND THE RESALE PRICES ACT, 1976 AND MODIFIED THE FAIR TRADING ACT, 1973

Copyright - Dr. S. Chakravarthy4 OBJECTIVES OF UK ACT CURB ANTI-COMPETITION PRACTICES CURB ABUSE OF DOMINANT POSITION MAINTAIN EFFECTIVE COMPETITION AND FAIR TRADING TO PROTECT THE CONSUMER MAINTAIN SURVEILLANCE OVER MERGERS

Copyright - Dr. S. Chakravarthy5 MERGER SURVEILLANCE NO OBLIGATION FOR ENTERPRISES TO NOTIFY MERGERS A MERGER QUALIFIES FOR REFERENCE, IF THE WORLD WIDE ASSETS ARE MORE THAN £ 70 MILLION (REDUCED RECENTLY TO £ 45 MILLION) OR MARKET SHARE IN THE UK IS 25 % OR MORE A MERGER QUALIFIES FOR REFERENCE IF THE TRANSFER OF ASSETS EXCEEDS £ 15 MILLION IN VALUE THE COMPETITION COMMISSION HAS POWERS TO INVESTIGATE MERGERS AND ADJUDICATE ON THEM NO ROLE FOR POLITICIANS IN MERGER CASES

Copyright - Dr. S. Chakravarthy6 APPROACH TO MERGER REGULATION COMPETITION COMMISSION WILL ARRIVE AT A BALANCE BETWEEN ADVANTAGES AND DISADVANTAGES OF MERGERS ADVANTAGES INCLUDE ECONOMIES OF SCALE, BETTER OPPORTUNITIES FOR LABOUR, EMPLOYERS AND MANAGERS AND GLOBAL COMPETITIVENESS DISADVANTAGES INCLUDE REDUCTION IN THE NUMBER OF PLAYERS IN THE MARKET, DISCOURAGEMENT OF NEW ENTRANTS IN THE MARKET, DICTATION OF PRICES BY THE MERGED UNDERTAKINGS AND EXERCISE OF DOMINANCE THE MAIN TEST IS THE BALANCE BETWEEN PUBLIC INTEREST AND CONSUMER INTEREST

Copyright - Dr. S. Chakravarthy7 REGULATORY AUTHORITY UNDER THE UK LAW, COMPETITION COMMISSION IS THE REGULATORY AUTHORITY THE INVESTIGATING AGENCY IS THE OFFICE OF FAIR TRADING (OFT)

Copyright - Dr. S. Chakravarthy8 CONSTITUTION OF COMMISSIONERS CHAIRMAN IS APPOINTED BY THE SECRETARY OF STATE THROUGH OPEN COMPETITION (NOLAN RULES) FOR A FOUR YEAR TERM RENEWAL OF APPOINTMENT OF A MEMBER IS PERMISSIBLE A CHIEF EXECUTIVE IS APPOINTED FOR THREE YEARS WHO IS THE ACCOUNTING OFFICER OF THE COMMISSION

Copyright - Dr. S. Chakravarthy9 OFFICE OF FAIR TRADING OFT IS THE STATUTORY INVESTIGATING AGENCY UNDER THE UK LAW IT CONSISTS OF A BOARD COMPRISING EXECUTIVE AND NON-EXECUTIVE MEMBERS AND HEADED BY A CHAIRMAN APPOINTMENTS TO OFT BOARD ARE MADE BY SECRETARY OF STATE, TRADE AND INDUSTRY IN CONSULTATION WITH THE CHAIRMAN OF THE OFT SELECTIONS BASED ON MERIT, EXPERIENCE AND INVESTIGATING SKILLS

Copyright - Dr. S. Chakravarthy10 POWERS OF THE COMMISSION THE COMMISSION HAS THE POWER TO: «ENQUIRE INTO CASES WHICH RAISE COMPETITION CONCERNS «CONDUCT MARKET INVESTIGATIONS ON REFERENCES FROM OFT «INVESTIGATE MERGERS ON THE COMPETITION PERSPECTIVE «RULE ON DISPUTED LICENSE AMENDMENT PROPOSALS IN THE REGULATED SECTORS

Copyright - Dr. S. Chakravarthy11 POWERS OF THE OFT OFT HAS THE RESPONSIBILITY TO: «TAKE ACTION AGAINST PARTIES IN BREACH OF COMPETITION ACT – ANTI-COMPETITIVE AGREEMENTS AND ABUSE OF DOMINANCE «ENFORCE AGAINST INDIVIDUALS COMMITTING CARTEL OFFENCE – DIRECTOR DISQUALIFICATION «CARRY OUT PRELIMINARY INVESTIGATION OF MERGERS AND DETERMINE WHETHER THEY SHOULD BE REFERRED TO COMPETITION COMMISSION FOR DETAILED INVESTIGATION «INVESTIGATE FEATURES OF MARKETS WHICH PREVENT, RESTRICT OR DISTORT COMPETITION AND DECIDE WHETHER TO MAKE A REFERENCE TO THE COMMISSION

Copyright - Dr. S. Chakravarthy12 INDEPENDENCE AND REVIEW PROVISIONS O THE COMMISSION IS ACCOUNTABLE NOT TO THE SECRETARY OF STATE BUT ONLY TO THE PARLIAMENT O THE DECISIONS OF THE COMMISSION ARE APPEALABLE TO HIGH COURT OF ENGLAND AND WALES, NORTHERN IRISH HIGH COURT AND SCOTTISH HIGH COURT O A FURTHER APPEAL LIES TO THE COURT OF APPEAL OR EQUIVALENTS IN NORTHERN IRELAND AND SCOTLAND

Copyright - Dr. S. Chakravarthy13 SECTORAL REGULATORS INDUSTRY – SPECIFIC REGULATORS HAVE COMPETITION POWERS COMPETITION ACT GIVES SECTORAL REGULATORS CONCURRENT POWERS IN THEIR RESPECTIVE SECTORS TO INVESTIGATE INFRINGEMENTS LIKE ABUSE OF DOMINANCE AND ANTI-COMPETITIVE AGREEMENTS (Eg: GAS AND ELECTRICITY MARKETS AUTHORITY, RAIL REGULATOR)

THANK YOU FOR YOUR KIND ATTENTION Copyright Dr. S. Chakravarthy