The Penrose review: Reshaping the UK competition regime?
Global | Video | November 2020 | 09:16
Video Details
| Mark Simpson | Hi Richard, it’s great to see you, to be talking again about the interesting world of competition law and competition policy. |
| Richard Whish QC | Nice to be here. |
| Mark Simpson |
Great, so today I thought we should talk about the Penrose review. So this is the review the Government announced in September 2020 that will be conducted by John Penrose MP looking into competition policy, and he’s been asked to speak to various people and to write a short report, and report back by the end of the year. Now some people might exclaim: “What? Another review?” We had Firman last year. Before that, at the beginning of 2019, we had the Tyrie letter, so that’s a letter from the Chair of the CMA to the then-Government with some recommendations on reform of the competition institutions and the legislative framework. And we have the upcoming – we assume still coming – BEIS review of the legislation. So how does this Penrose review fit into all of this and what do you think this is getting at? |
| Richard Whish QC | Well, I can see that it may, to some people, seem a bit bewildering. I mean, we’ve got an incredible number of plates spinning at the moment and quite apart from what you’ve said, of course, we have got COVID-19 and we’ve got Brexit, but I think this does make sense, actually. Remember that the BEIS review, that was required by legislation, so that’s a quinquennial review that the ERRA of 2013 requires so that was already underway anyway. Obviously Brexit is a huge complicating factor, then we’ve had Firman and it seems to be quite clear that there’s going to be some sort of system put in place to deal with digital platforms and so on. Then we had Lord Tyrie and his proposals and remember there were lots of quite detailed pieces of work in there about tweaking the MIR system and so on and so forth. And, of course, we have got a new Government. I mean, it’s a Conservative Government, but it is a profoundly different Conservative Government from the previous one. So insofar as you’ve got all these plates spinning, I can see the sense of asking someone like John Penrose to just say – and they do emphasise a short, quick report – as it were, pull all these strands together, you know, what’s the sensible way forward? And actually it seems to me to be quite a smart thing to do, actually. |
| Mark Simpson | OK, so there seems to be a reason to the method here, but let’s talk a little bit about John Penrose MP. Now he’s not someone who is deeply steeped in the competition law or policy community – he wasn’t a practitioner; I don’t think he’s studied the subject closely over the years. But he did produce a paper in 2018 called “A Shining City Upon a Hill.” |
| Richard Whish QC | He did indeed… |
| Mark Simpson | That one, exactly, which was all about thinking about the capitalist system, and within that he does mention competition law. He actually talks about the need for a new Competition Act and he calls out the Competition and Markets Authority, the UK’s competition regulator, and suggests that the authority needs more powers. And he makes some other observations, rather general observations, about how the system works. What do you think this signals about his thinking, where the report might go and maybe the Government’s thinking on these issues? |
| Richard Whish QC | Well, I do think this piece of work was a very interesting one, because what it was trying to do was to say, you know, to what extent is the capitalist system not working and, in particular, not working for vulnerable consumers? Well, I can see how this rather fits in with this Government, this new Conservative Government’s position on things and breaching the “red wall” in the Midlands and the North of England and so on and so forth. So I can see that as a person he has thought about the system very deeply, including regulation and competition policy, but with a much broader horizon, so he does seem to be a sensible person to conduct this particular piece of work. |
| Mark Simpson | Do you think there are particular areas in the regime that he might look at more closely than others, or to put it another way, areas where we might believe that there will be quite a change in direction? |
| Richard Whish QC | I’m not sure that we’ll see a radical change of direction. This is just my own personal feeling about these things. Let’s face it, our basic competition rules by the time you’ve got Chapter I, Chapter II and the market investigations system, there’s not a lot that can’t be looked at. I find it difficult to believe that there is a whole new set of competition tools that would radically change things, but I do think that there are bits and pieces here and there that can be improved. And if you go back to the Tyrie proposals, everyone spoke a lot about judicial review as opposed to appeals and whether there should be an overarching duty to put the consumer’s interest first. Well, those are interesting questions, but there was a lot of much more prosaic stuff in the annexes to the Tyrie proposals, like should one have the power to adopt interim measures in the course of a market investigation system or should interim measures be used more generally, are there things that can be done to encourage more whistleblowing, should there be stronger penalties where firms fail to provide information in the course of merger investigations and antitrust cases, etc.? So there is quite a lot of stuff there which didn’t make as much of an impact because people were more interested in appeal and judicial review and whatever, but there is work there still to be done. There is a separate thing in Tyrie, and this is not a competition law point, but I think it is a bit bizarre that you have an institution like the CMA that ultimately is there to make sure that markets work well, and it has competition powers which are fairly formidable and big fines can be imposed, and it has consumer protection powers which in some markets can be just as important if not more important than the competition provisions and if the CMA identifies a problem it can take you to court and ask for an injunction to tell you not to do it again. This is a very strange mismatch between the consumer protection powers and the competition powers, and if one thing good could come out of all of this I’d like to see the CMA given the powers to enforce consumer protection law in the way that they enforce competition law. |
| Mark Simpson | Well, that certainly seems to chime with some of what he’s written previously, as you say, thinking about rebalancing the system in favour of consumers. If we think about business and their perspective, do you think there are any areas where there might be a risk of more intrusive additional rules or regulation, or perhaps an emphasis on greater enforcement using existing powers? |
| Richard Whish QC | Well, I don’t see that that necessarily has to be the case at all. I’m sure people will intuitively worry about it. I’m standing back objectively and looking on from outside, I don’t see that as a problem, no. |
| Mark Simpson | OK, so it sounds as though we might be about to see something else emerge which picks up many of the themes of the Tyrie letter that you’ve talked about. So, do you think we are right to assume that the proposals in that letter which were fairly broad ranging as you noted and related to institutions and the extent of their powers and their priorities, do you think that this might actually add a bit more wind to the sails behind those proposals and that they might actually emerge rather than being consigned to the dustbin? |
| Richard Whish QC | Well, I have no idea what’s going to happen next. I don’t have any sort of inside knowledge. As I look at things at the moment, I would’ve thought that something does need to be done about Firman, to implement Firman, and that’s a very complicated piece of work and the Digital Markets Taskforce and so on and so forth. My inclination would be to take that forward and then all this other stuff around competition law, perhaps consumer protection law, etc., the BEIS quinquennial review, I could see that sort of coming together at a slightly later date. I would assume in due course there would be legislation, but as to when that would happen – my hunch is it’s a fair way in the future. |
| Mark Simpson | OK, I think that’s a good place to end this. Thanks a lot Richard, that’s really interesting. We’ll look for further developments in due course. |
| Richard Whish QC | We will be busy, I’m sure. |
| Mark Simpson | Indeed. |