CC recommends changes to remedies procedure for market investigations

On 24 February 2010, the Competition Commission (CC) published a set of recommendations on changes in its approach to remedies in market investigations.

These recommendations follow an internal CC review prompted by two partly successful appeals against aspects of remedies resulting from the CC investigations into the payment protection insurance and the groceries markets.

The CC particularly reviewed how it assesses the effectiveness, timeliness and proportionality of remedies in market investigations and how this is expressed in its reports.

The recommendations include:

• allowing more time for the remedies phase in market investigations, particularly for design and evaluation of remedies. The CC notes that “in part”, this will mean stricter time limits in the earlier review phases of CC market investigations;
• greater focus on the mechanism and impact of remedies; and
• a more structured framework for developing, expressing and scrutinising remedies decisions.

The CC intends to implement many of its proposals, where appropriate, on a trial basis in the current local buses market investigation.

Further points arising from this review include:

• the CC proposes to devote equal time to assessing an adverse effect on competition and to work on remedies;
• the CC will follow a stricter policy regarding cut-off dates for receiving submissions of evidence;
• the CC’s notice of possible remedies will in future be “far more focused on genuinely practicable remedies options than at present”. This will entail, amongst other things, more focused information requests;
• continuity of staff involved in the remedies phase;
• the CC intends to set out its approach to proportionality and to assessing the costs and benefits of remedies in new market investigation guidance;
• it is a high priority for the CC to ensure that economic reasoning is presented in such a way that it is fully comprehensible to readers who are not specialists in economics;
• the CC will introduce internal multi-disciplinary peer review of the CC’s draft provisional decision on remedies;
• the CC recognises the need to enhance scrutiny of remedies and will work to identify the most efficient approach.

Please click here for the CC press release and here for the full text of the CC’s recommendations.