In the News
Competition Commission issues final report in audit market investigation
In its final report on the supply of statutory audit services to large companies in the UK, the CC has confirmed its view that competition is restricted in the audit market due to factors which inhibit companies from switching auditors and by the incentives that auditors have to focus on satisfying management rather than shareholder needs. The final report follows the provisional findings report which was published in February, as well as the provisional decision on remedies in July. The CC has set out a package of remedies in response to these findings, which includes measures to improve the bargaining power of companies and encourage rivalry between audit firms; measures to enhance the influence of the Audit Committee; and measures to promote audit quality and shareholder engagement in the audit process. In particular, FTSE 350 companies will be required to put their statutory audit engagement out to tender at least every ten years. Click here.
Competition Commission accepts price control remedy in china clay merger
The CC has issued its final report in relation to the merger of Imerys Minerals Limited and Goonvean Limited. The CC found that the two parties supply over 90 per cent of the kaolin used by UK customers in the performance-mineral applications market. As this is only one of a number of markets supplied by the parties and the CC concluded that other ways of addressing the CC's concerns would be impractical or disproportionate, the CC has decided that the remedy should be a five-year price control for the supply of kaolin used in the manufacture of paints and adhesives. The price control means that the merged company will not be required to sell any of its operations. Click here.
Commission approves acquisition of Greek airline Olympic Air by Aegean Airlines
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Olympic Air by Aegean Airlines. The Commission's in-depth investigation concluded that Olympic Air would be forced to exit the market in the near future due to financial difficulties if not acquired by Aegean, so the merger would cause no harm to competition that would not have occurred anyway. The Commission blocked Aegean's previous attempt to merge with Olympic in 2011. Click here.
UK
OFT
- The OFT has launched a market study into the supply of information and communications technology (ICT) goods and services to the public sector. The market study follows an OFT call for information which raised a number of issues that the OFT believes merit further analysis. Most notably, concerns were raised that certain businesses appear to have a large share of contracts in some areas of the sector, that there are high barriers to entry and expansion (especially for smaller scale ICT businesses) and that public sector organisations face difficulties and high costs in switching suppliers. Click here.
Other
- The Government has announced that a Payment Systems Regulator will be established to regulate the activities of participants in payment systems and that the new regulator will have concurrent competition powers. Click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
