Water Merger References: Competition Commission Guidelines
Consultation Draft

Introduction

This consultation document seeks views on guidance that the Competition Commission (CC) proposes to issue outlining its proposed approach to assessing water merger references referred to it by the Office of Fair Trading (OFT) under the water merger regime set out in the Water Industry Act 1991 as amended by the Enterprise Act 2002 and the Water Act 2003. The guidance will form part of the advice and information published by the CC under the Enterprise Act 2002.

The guidance has been drawn up following consultation with members of the CC.

Responses

You can respond to this consultation:

by email to:

by post to:

Susan Maunsell
Competition Commission
Victoria House
Southampton Row
London
WC1B 4AD

Enquiries to

email as above or telephone 020 7271 0287 /fax 0207271 0367

Closing date

Responses should be received by 29 October 2004.

Executive summary

The Water Industry Act 1991 put in place a special merger regime for mergers between water enterprises (that is, water and sewerage undertakings). The Enterprise Act 2002 made changes to how all mergers are regulated, and included provisions (not yet in force) to make amendments to the Water Industry Act merger provisions. These changes will align the water merger provisions more closely with the Enterprise Act general merger provisions The CC is determinative in merger cases, including water mergers, referred to it by the OFT. The changes include the questions which the CC has to answer in respect of water mergers.

The draft water merger guidance attached is intended to apply to water mergers referred to the CC by the OFT in the same way as Merger References: Competition Commission Guidelines (CC2) already applies to general merger references. It covers the CC’s approach to the questions of whether a merger is anticipated or has taken place and if so, whether that merger has prejudiced or may prejudice the ability of the Director General of Water Services to make comparisons between water enterprises. It describes how that latter question might be addressed. It goes on to describe how, if the CC finds prejudice, it might go on to consider what remedy might be appropriate and to what extent there may be customer benefits from the merger which should be taken into account in deciding on the remedy.

It is intended that the amendments to the Water Industry Act 1991 will be brought into force around the end of 2004 and at that point the new water mergers regime will take effect.

The proposed guidance is self explanatory and there are no particular sections of the document that the CC wishes to draw to consultees’ attention. We would, however, welcome comments on the guidance either of a general nature or on any specific points.

How to respond

See above for contacts and final date.

When responding please state whether you are responding as an individual or representing the views of an organisation. If responding on behalf of an organisation, please make it clear who the organisation represents and, where applicable, how the views of members were assembled.

Copies of this consultation document are available from the CC’s website: www.competition-commission.org.uk

Confidentiality

The CC may wish to publish your response. If you do not want all or part of your response or name made public, please state this clearly in the response. Any confidentiality disclaimer that may be generated by your organisation’s IT system or included as a general statement in your fax cover sheet will be taken to apply only to information in your response for which confidentiality has been requested.

Next steps

A summary of the consultation and outcome will be provided during November 2004 on www.competition-commission.org.uk and the final guidance will be published.

Downloads

Water Merger References: Competition Commission Guidelines document

Press Release