CC launches consultation on market investigation guidelines

The Competition Commission (CC) has launched a consultation on its market investigation guidelines. Comments are requested by 14 May 2010. This consultation was trailed in the CC’s February 2010 remedies review (see our earlier law now on the remedies review).

The guidelines under scrutiny were published in 2003 and set out the CC’s approach to reviewing whether features of a particular goods or services market in the UK prevent, restrict or distort competition.

The CC believes the time is right to review the guidelines now that it has reported on nine market investigation references and issued new merger remedies guidelines. It also bears in mind the Competition Appeal Tribunal’s judgments involving three CC market investigations.

Recent CC market investigations include those considering the groceries market and the payment protection insurance market.

Issues highlighted by the consultation paper include:

• market definition – including possibly focusing purely on demand side constraints;
• the counterfactual – various options for an appropriate benchmark;
• market features – the CC also is considering how best to distinguish market “features” from “outcomes” and from other aspects of the market contact that affect competition;
• theories of harm – whether to include explicit reference to the role of such theories of harm;
• indicators and measures of the extent of competition – including whether to provide additional guidance on measurement and interpretation of profitability;
• remedies – the CC expects this part of the guidance to be significantly revised.

The CC is particularly keen to know:

• whether its consultation raises the right issues or there are other issues of particular concern;
• what aspects respondents would like to see discussed in revised guidelines;
• any alternative approaches to the options identified by the CC; and
• other aspects of the existing guidance which should be expanded or amended.

This consultation is an opportunity to influence the CC’s thinking on the UK’s market investigation regime. If you wish to discuss any aspect, including points you would like to raise in any consultation response, please get in touch with us.