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Decision-Making Powers and Institutional Design in Competition Cases: The Application of Competition Rules by Sectoral Regulators in the United Kingdom

 |  September 9, 2014

Jackie Holland, Aurora Luoma, Sep 11, 2014

In the United Kingdom various sectoral regulators have concurrent power to apply EU and U.K. competition law alongside the national competition agency, the Competition and Markets Authority (“CMA”). It is a somewhat unusual system and there has been much debate over past years about whether this system works effectively or whether it results in the underuse of competition law powers in regulated sectors. Recent reforms in the United Kingdom have sought to reinforce competition law enforcement by sectoral regulators. Moreover, concurrency is on the increase with additional regulators having been given concurrent powers over recent years and the CMA indicating that it will also focus its attention on competition in regulated sectors.

It remains to be seen what these developments mean in practice for the regulated sectors, but we can expect increased efforts to apply competition law in these sectors, both by the CMA and the regulators themselves. The success of these efforts will depend on the institutional design and decision-making structures within sectoral regulators and how well these promote the use of competition law powers, where appropriate, in a consistent and effective manner — something which will need to be worked out by the regulators and CMA on the ground.

In this paper, we focus on the topics of institutional design and decision-making within sectoral regulators in relation to competition cases. We start by considering why there has been so much focus on ensuring that the competition rules are applied in the regulated sectors in the United Kingdom. We then review alternative models for applying competition rules in regulated sectors used in different jurisdictions and consider the internal institutional design factors that might influence the sectoral regulators’ focus on competition cases in the U.K. context.