The Enterprise Act 2002 received Royal Assent on 7 November 2002 and contains significant reforms of UK competition law, which are expected to be brought into force mid-2003. These reforms include the criminalisation of cartels where the participants, including individual directors and employees and not just companies, have been shown to be dishonest. In addition, the Act introduces the possibility of disqualification of individual company directors for participation in competition law infringements. Therefore individuals as well as companies will need to consider their positions when infringement actions are brought.
The new Act effects institutional reform, creating the Office of Fair Trading (“OFT”) as a statutory authority in place of the Director General of Fair Trading as the relevant authority, who was previously supported for practical purposes by the current Office of Fair Trading. The new Act contains a new merger control regime replacing the current rules under the Fair Trading Act 1973; the most important changes are that (except where issues of national security are involved) the OFT will have final decision-making power on referrals to the Competition Commission and that the Act introduces a new UK turnover test (of £70 million) in place of the current £70 million gross assets test for referrals for full investigation by the Competition Commission. The Act retains the current alternative test of 25% share of goods or services in the UK. The test for which mergers may be prohibited, or remedies required, will be one of a substantial lessening of competition, although in practice this is already the key factor in applying the current public interest test of the current UK merger control regime.
The Act also introduces new rules for market investigations of markets suspected of involving restrictions or distortions of competition, in place of the current system of monopoly enquiries under the Fair Trading Act 1973. The Act also introduces express provision for designated consumer bodies to make “super complaints” to the OFT, with set time scales for the OFT to respond, where there are features of the market that may be harming the consumers to a significant extent.