Clause 68 - Initial enforcement orders: completed mergers

Part of Enterprise Bill – in a Public Bill Committee am 10:30 am ar 1 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Douglas Alexander Douglas Alexander Minister of State (e-Commerce & Competitiveness) 10:30, 1 Mai 2002

Perhaps I can help the hon. Gentleman by clarifying our response to both the CBI and the probing amendment. The amendment would prevent the OFT from introducing an initial order unless it has a reasonable suspicion that the creation of the relevant merger situation has resulted, or may be expected to result, in a substantial lessening of competition. In practice, however, if the OFT were to hear about a merger that clearly has no competition implications—for example, two businesses in very different markets—it would be highly unlikely to make an order preventing further integration of the merged entity. The OFT will act only if it is concerned about the merger's likely impact on competition. I am confident that the additional criterion required by the amendment will be applied automatically in practice.

We have not formally introduced such a requirement in the Bill because, not least, we foresee difficulties in drafting it in a workable way. The problem is that it is difficult not to set the test too high and thereby render the clause unworkable in practice. To make a reference, the OFT must believe that a relevant merger has resulted or may result in a substantial lessening of competition in any market or


markets. Any test would have to be sufficiently lower than that belief in order to allow the OFT to act while it establishes whether there is a case for a full reference. I assure the Committee that we have considered that carefully and we are not convinced that we can create a workable formula.