The UK's Enterprise and Regulatory Reform Act 2013, which received Royal Assent on 25th April is making sweeping changes to the UK's competition regime. The Act will come into force by April 2014.
The Enterprise and Regulatory Reform Act 2013 also makes changes to legislative procedure by allowing future reforms to exceptions to copyright to be delivered through new regulations, not new Acts of Parliament.
The term of protection given to creative designs that are manufactured through an industrial process has also been extended. Designers of these works will now have rights for the duration of their life plus 70 years after they die.
The competition provisions of the Bill went through both the Houses with very few substantive changes to the original proposals. Two notable changes are:
the Secretary of State was given new powers to remove the competition functions of the sectoral regulators if s/he considers that it is appropriate to do so for the purpose of promoting competition; and
the new defences to committing a cartel offence were added, and the dishonesty test was removed.
Summary of changes
The Competition Commission (CC) and the competition functions of the Office of Fair Trading (OFT) are merged into a single competition authority, the Competition and Markets Authority (CMA). The CMA is due to come into legal existence in October 2013 and will become fully operational, with the functions of the OFT and CC transferred to it, in April 2014.
Changes to the cartel offence where the dishonesty test has been removed from the offence in order to make it easier to prosecute. The new definition now refers to agreements not made openly. In addition, individuals charged with the cartel offence will have a defence if they can show they did not intend to conceal the nature of the cartel arrangements or where they took reasonable steps to seek legal advice.
The existing administrative model for antitrust enforcement is maintained but a number of enhancements have been made in order to improve the quality of decisions and to reduce the length of time to resolve cases.
The merger control regime remains voluntary and the current jurisdictional thresholds are not being changed, but the CMA will have greater powers to keep business separate and prevent further integration. New statutory timetables have been introduced for Phase 1 review, for undertakings in lieu of a Phase 2 reference, and for the remedies implementation at the end of Phase 2.
Statutory timetables have been introduced for all stages of the market investigations process. The CMA has been given powers to carry out cross-market investigations in order to deal with issues that are common to a number of markets in one investigation.
As well as procedural changes in legislation and extension of the term of protection, the Enterprise and Regulatory Reform Act 2013 paves the way for new regulations on 'orphan works' and collective licensing to be set out. The Act allows the Government to set statutory codes of conduct with which collecting societies are to comply, although the Intellectual Property Office (IPO) has said that it would only use the "backstop" powers if voluntary rules do not solve concerns about the existing regime.
Orphan works are copyrighted material, such as books, films and music, which have no identified owner. At the moment many orphan works lie in storage in libraries and other institutions and, because of copyright law, cannot be digitised or used without permission until the term of copyright expires.