This post was also written by Richard J. Waite and Susan Riitala.

The UK Government recently announced proposals to merge the UK’s two main competition bodies, the Office of Fair Trading (OFT) and the Competition Commission, to create a single competition regulator. Currently the OFT, as well as being responsible for conducting antitrust and cartel investigations, also conducts initial merger reviews and market studies. The Competition Commission acts as a second phase review body, conducting more in-depth reviews of those mergers or markets referred to it by the OFT (or, in some case, concurrent regulators) that appear to give rise to more significant competition issues.

The move comes as part of the UK Coalition Government’s plans to simplify the work of public bodies, with the creation of a single competition authority intended to streamline procedures and create a stronger enforcement authority. The new body would be responsible for all merger reviews, market investigations, and cartel and antitrust cases. A public consultation on the options for creating the new competition and markets authority is planned for 2011.

Some commentators have raised concerns that the merger would damage the objectivity and independence from political pressures offered by the current system. However, without having the detail of how the new body would operate, the risk of increased political interference in practice would seem relatively low and it is likely that measures could be put in place to protect objectivity in the two-stage review process, which it appears will be retained. Such issues will undoubtedly be addressed in next year’s public consultation process.

On the whole, the announcement is positive and should be welcomed. Frustrations with the existing system include that the Competition Commission begins investigations from scratch once the OFT has already been working on the same case. The proposal should not only cut down the overall timetable of investigations, but should also reduce the time spent by companies providing information to the different authorities when under scrutiny. In a statement issued by the OFT, Chief Executive John Fingleton confirmed that the OFT had advocated the merger for some time and highlighted its potential benefits, pointing to the ability to deliver “better, faster results for consumers and the economy, and greater consistency for businesses”.