Competition Bill 1998: Summary of the key amendments to the Bill in the House of Commons

Competition Bill 1998

(1)Summary of key amendments to the Bill in the House of Commons

(2)OFT issues further draft guidelines

(3)Draft procedural rules published

The Competition Bill has now completed its passage through the House of Commons and will return to the House of Lords in the autumn. Royal Assent is expected by the end of the year. Several amendments to the Bill were made in the House of Commons, the most important of which are set out below.

Key amendments

The scope of the powers of investigation of the Director General of Fair Trading (DGFT) is widened to enable him to obtain 'specified information' from firms, in addition to 'specified documents'. This is a major enhancement of the DGFT's powers.

The ability of the DGFT to impose financial penalties for infringement will be confined to cases where he is satisfied that the infringement was committed intentionally or negligently. This is a significant concession.

A power has been introduced enabling the Secretary of State to deal with vertical agreements and land agreements in secondary legislation by giving them "special treatment". It is intended that the sanctions for breach of the Chapter I prohibition (invalidity, financial penalties, third party rights of action) would not apply to certain vertical agreements and land agreements. There remains some uncertainty in relation to the policy towards vertical agreements as the Government does not want to pre-empt the outcome of the Commission's review of vertical restraints.

A power is introduced enabling the Secretary of State to make regulations to co-ordinate the activities of the DGFT and utility regulators, where they share functions under the Bill. This is a significant concession which recognises the difficulties inherent in the concurrency model.

The transitional provisions are replaced with new, more detailed provisions to deal with the period before the new regime comes into force (probably early 2000). Key provisions are:

• most existing agreements have a 1 year period of grace from early 2000;
• most agreements will no longer need to be furnished under the RTPA from enactment to the coming into force of the new regime (when the RTPA will be repealed);
• no transitional period for abuse of dominance;
• possibility of applying for "early guidance" in respect of agreements made between enactment and coming into force.