Competition Regulation
the British Way

Jaguar or Dinosaur?

By Sir Bryan Carsberg
Dec. 1996
Institute of Economic Affairs
ISBN: 0-255-36376-1
32 p.
$9.95 Paper Original

1. Promoing competition is better than detailed regulation. The results of competition may 'outstrip the daring of even the boldest regulator'.

2. Competition policy should aim at enhancing competition in the market-place. Measures which deter business from anti-competitive behavior are particularly valuable because of their cost-effectiveness.

3. British competition policy is too complex and needs 'thorough-going reform'. Four Acts of Parliament set the basic framework. In addition are teh Acts establishing regulatory systems for the utilities and for other activities (such as financial services) and European Union law governing competition.

4. Complexity leads to excessive costs for business. Some regulation is inevitable but it should be '... as low in bureaucracy and burdens as possible'.

5. Another failing in British competition law is its '... lack of deterrent quality'. Very little business behavior is illegal.

6. There is merit in the 'prohibition approach' under which certain types of behavior are declared illegal and can lead to immediate prosecution and penalty.

7. The law on restrictive practices should be changed to a prohibition approach, though it would probably be difficult to apply that approach to abuses of dominant positions.

8. Instead of the present separation between the Office of Fair Trading and the Monopolies and Mergers Commission, which wastes resources, there should be a 'unitary competition authority'. It would include a Director General, and a Commission (mainly full-time) would be its decision making authority.

9. There is too much Ministerial interference in competition policy where most decisions '... should be treated as matters of law enforcement rather than political matters'. Ministers should formulate general policy and let 'competition professionals' implement it.

10. As competition becomes effective in the utilities, specialist regulation may eventually be discontinued. In the meantime, separate regulatory authorities should continue.

European Studies
Series: Occasional Paper

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