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There are times when the law can have a considerable impact on the way in which a market operates, including the normal process of competition.
There may of course be very sound reasons, including health, environmental and safety benefits for consumers, which outweigh any detrimental effect on competition in a market. In considering the OFT's reports, the Government balances competition concerns identified against the other public policy considerations of the law. The government has made a commitment to respond to any OFT recommendations concerning regulations within 90 days.
The OFT has recently published a report on Government in Markets, which provides advice on the impacts that government policy can have on markets, and how interventions might be designed to minimise any distortions of competition.
If the OFT is concerned about the effect existing regulations are having on competition, we are able to report on these to the Government. Typically, this is likely to be as part of a market study.
The OFT reports on competition concerns not only about existing laws but also about draft legislation. This demonstrates the importance the Government places on strong and effective competition in promoting benefits to the consumer and enhancing productivity.
In addition to the OFT's competition enforcement functions, under the Enterprise Act 2002 we seek to influence government policy in order to ensure markets work well for consumers. This includes competition scrutiny of Impact Assessments (IAs), previously known as Regulatory Impact Assessments (RIAs). The OFT has provided advice and training to other government departments on competition assessments in RIAs since 2003.
In 2006, we reviewed the effectiveness of the competition assessment. We concluded that it was too heavily focused on market structure and market shares, rather than on identifying the likely impacts on competition. Consequently, the OFT has redesigned the competition assessment and redrafted the guidelines, so that they focus more on the likely effects on competition of proposed regulations.
Download Completing competition assessments in Impact Assessments (pdf 152 kb).
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