The Competition Commission – A 1970s anachronism?


In 1999, the Competition Commission succeeded the Monopolies and Mergers Commission (MMC), which was established in the 1970s during an era of unlamented corporatism.

The CC continues to undertake sector investigations – a useful little earner for lawyers and a few superannuated academics. Hardly surprising, perhaps, that there is a strong lobby to investigate the planned UK tie-up between Orange and T-Mobile. Regulators talk grandly of invoking the ‘nuclear option’ – a reference to the CC. But what does the CC actually bring to the party?

Its advocates will point to the various mergers that the CC ruled against – and were endorsed by Government. But whether banning these planned mergers benefited UK plc is doubtful. In recent years, MMC/CC intervention has been unpredictable. The CC has just announced yet another investigation into the bus sector outside London. As expected, Stagecoach, the doyen of such enquiries – and the bearer of battle honours from Darlington and Carlisle – has been critical: sector investment will be delayed.

In aviation, the lengthy enquiry into BAA’s airport ownership produced the obvious results. BAA should sell Gatwick and Stansted airports. And, given the row about panel membership at that enquiry, those responsible should read the well-known case – studied by most law undergraduates - of R v Sussex Justices (1924) regarding justice being seen to be done.

In the energy sector, the MMC/CC’s efforts have been ineffectual. The long saga of the MMC and British Gas held back the latter for years – until peace was eventually signed by Ofgas and British Gas with the Treaty of Transco. Subsequently, British Gas’ three succeeding companies have prospered. Since the large energy players are crucial in building new power plants, their supply businesses – despite many threats of CC referrals – have avoided real scrutiny.

With the next Government seeking savings, should the CC be finally put down?