Book Review: Competition in British Industry: Restrictive Practices Legislation in Theory and Practice

• Date: 01 June 1976
• Published date: 01 June 1976
• DOI: 10.1177/0003603X7602100209
• Author: Richard E. Caves
• Subject Matter: Book Reviews

BOOK

REVIEWS

431

Dennis Swann, Denis P. O'Brien, W.

Peter

J. Maunder,

and W. Stewart Howe, Competition in British Industry:

Restrictive Practices Legislation in Theory and Practice,

London: George Allen &Unwin (1974), 232 pp., £4.20.

In

1956 the

United

Kingdom enacted

its

first substantial

legislation on collusive business practices, requiring the regis-

tration

of all combinations to restrain

trade

and providing

amechanism for the challenge and disallowance of those not

justified by certain

stated

objectives or effects.

It

shortly

became clear

that

few agreements could survive the

test

of

official scrutiny,

and

horizontal agreements to fix prices and

divide markets were abandoned wholesale. This dramatic

experiment in

antitrust

policy previously received a brief

examination by

J.

B. Heath' and has now been investigated

in depth by Professor Swann and his associates. They under-

took detailed studies of 18 industries in which collusive agree-

ments

had

operated, including four upheld by the Restrictive

Practices Court

and

14 either struck down or abandoned

without contest. These industry studies

are

published sep-

arately" with the results summarized briefly in the volume

under review. Twenty-two more industries were subjected

to less extensive investigations, providing a combined sample

of 40 industries. The 40 industries studied run toward un-

differentiated or weakly differentiated products sold by

moderately numerous firms; they

are

probably typical of

industries in which overt collusive agreements are necessary

to effect any monopolistic restriction of output.

Chapter 4, the

heart

of the volume, describes the opera-

tion of the agreements and the effects of

their

abandonment.

Each

restrictive agreement typically covered

at

least four-

fifths of the industry's domestic sales, though some small

firms usually stayed outside. The

parties

often included all

1J. B. Heath, "Restrictive Practices

and

After," 29 Manchester

School 173 (1961).

:.I Oompetition in British Industry: Case Studies of the Effects

of

Restrictive Practices Legislation, Department of Economics, Lough-

borough University of Technology.