Competition Policy in Britain: The Silent Revolution

• Author: D. P. O'Brien
• DOI: 10.1177/0003603X8202700107
• Published date: 01 March 1982
• Date: 01 March 1982
• Subject Matter: Article

The Antitrust Bulletin/Spring 1982

Competition policy in Britain:

the silent revolution

BY D. P. O'BRIEN*

217

Competition policy in Britain is enshrined in a series

of

statutes

which give it a predominantly legalistic form. The 1956 Restric-

tive Trade Practices Act' set up the Restrictive Practices Court

and the associated organs

of

government; agreements

of

a restric-

tive nature were registered and, for the most part, declared

unlawful by the court. The net

of

the legislation was widened, to

cover information agreements and agreements relating to ser-

vices, by the

1968,2

1973,3

and 1976

4acts. It is true that competi-

tion policy began with the Monopolies and Restrictive Practices

Act

1948,5

which established the Monopolies Commission. But

the general consensus is that the operations

of

this body prior to

1956 were not very effective in inducing industry to compete." Its

•Professor of Economics, University

of

Durham, England.

Restrictive Trade Practices Act, 1956, 4 &5 Eliz. 2, c. 68.

2Restrictive Trade Practices Act, 1968, c. 66.

3Fair Trading Act, 1973, c. 41.

4Restrictive Trade Practices Act, 1976, c. 34.

5Monopolies and Restrictive Practices (Inquiry and Control) Act,

1948,

11

&12 Geo. 6, c. 66.

6See G. Polanyi &P. Polanyi, The Fair Trading Bill

and

Monop-

oly Policy, Three Banks Review, No. 98, 1973, pp. 23-29, at p. 24:

19 1982 by Federal Legal Publications, Inc.

218 The antitrust bulletin

work was extremely valuable, but as a

"major

reconnaissance

of

the field,

"7

not as an active form

of

competition policy.

After the passing

of

the 1956 act, the Monopolies Commis-

sion, which was reduced by that act to a subordinate role,

operated at a low level

of

activity. In the years 1958-65, the

commission produced only six reports, or an average

of

about

one per year. After this time the level

of

activity increased and it

produced 22 reports in the years 1966-72, or an average

of

just

over three per year. This does not include the merger references

with which it dealt, but they were only a tiny fraction

of

a

separate

problem-around

2Y2

070

of

the mergers actually consid-

ered by the merger panel were referred to the commission."

By far the predominant role in the operation

of

competition

policy was borne by the Restrictive Practices Court; indeed it

would be perfectly true to say that this was the only form

of

competition policy which had a widespread and deep effect on

British industry. Yet, since 1973, a silent revolution in the

operation

of

competition policy in Britain has occurred, so that

this predominantly legalistic approach has been supplanted by the

development

of

an administrative and discretionary procedure.

This process has culminated in the Competition Act

of

19809and

it is provisions

of

this which will be discussed first.

" . . . the Act

of

1948 was no resolute attack on monopoly and

restrictive practices

but

rather an open-minded pragmatic

approach."

The best account

of

the operations

of

the Monopolies Commission in its

early years is contained in

G.c.

ALLEN,

MONOPOLY

AND

RESTRICTIVE

PRACTICES

ch. VI (1968).

7 A.

HUNTER,

COMPETITION

AND

THE

LAW

79 (1966).

8 See J.D. Gribbin, Recent Antitrust Developments in the United

Kingdom, 20

ANTITRUST

BULLETIN

382-83 (1975).

9Competition Act, 1980, c. 21.