What is the Competition Commission?

The Competition Commission is an independent public body established by the Competition Act 1998. It replaced the Monopolies and Mergers Commission on 1 April 1999.

The Commission conducts in-depth inquiries into mergers, markets and the regulation of the major regulated industries. Every inquiry is undertaken in response to a reference made to it by another authority: usually by the Office of Fair Trading (OFT) but in certain circumstances the Secretary of State, or by the regulators under sector-specific legislative provisions relating to regulated industries. The Commission has no power to conduct inquiries on its own initiative.

The Enterprise Act 2002 introduces a new regime for the assessment of mergers and markets in the UK. In most merger and market references the Commission is responsible for making decisions on the competition questions and for making and implementing decisions on appropriate remedies. Under the legislation which the Act replaces, the Commission had to determine whether matters were against the public interest. The public interest test is replaced by tests focused specifically on competition issues. The new regime also differs from the previous regime where the Commission’s power in relation to remedies was only to make recommendations to the Secretary of State.

The Commission consists of members, who are supported by staff. The Chairman of the Commission is also a member of the Commission and chairs the Council (the strategic management board). The Council also includes the Deputy Chairmen, the Chief Executive, and two non-executive Commission members appointed to the Council.

Members are appointed by the Secretary of State for Business, Enterprise and Regulatory Reform for an eight year term following an open competition. They are appointed for their individual experience, ability and diversity of background, not as representatives of particular organisations, interests or political parties. There are usually about 50 members and except for the Chairman, Mr Peter Freeman, they work part-time. Three members are currently appointed as Deputy Chairmen: Mr Christopher Clarke, Mrs Diana Guy and Dr Peter Davis.

There are specialist panels for utilities, telecommunications, water and newspapers. The utilities panel is the specialist panel for gas and electricity inquiries.

The Chairman appoints a group of members (usually four or five) to undertake each inquiry. Members (other than newspaper panel members) may be appointed for any type of inquiry. Utility, telecommunications, water and newspaper inquiries have to have at least one member from the appropriate panel.

The Competition Commission has a staff of about 150, headed by the Chief Executive and Accounting Officer, Martin Stanley. The staff include administrators; professionals (accountants, economists, business advisers, and lawyers); and support staff, such as information services, finance and human resources. About two-thirds are direct employees; the remainder are on temporary contract or on loan from government departments.

A list of senior staff can be found in the Commission’s Annual review and accounts, which reports on the Commission’s work in the previous financial year. The Chairman and the Chief Executive, as Accounting Officer, are answerable to Parliament for the work of the Commission and its use of resources and may be called to appear before Parliamentary Select Committees.