* New super regulator in place by April 2014
* Proof of dishonesty ditched from cartel offence
By Huw Jones
LONDON, March 15 (Reuters) - Britain announced plans for a super trust-buster on Thursday to cut costs and speed up enforcement in a move critics say unfairly lowers the bar to prosecuting cartels.
The government is proposing to create a Competition and Markets Authority (CMA) by combining two existing agencies that handle competition and mergers: the Office of Fair Trading and the Competition Commission.
“The UK competition regime is highly regarded internationally but the government believes that there is scope to improve the effectiveness of competition enforcement and streamline the processes,” Baroness Wilcox, a junior business minister, said in a statement.
The CMA will be fully operational by April 2014 and its primary duty will be to promote effective competition in markets across the UK economy for the benefit of consumers, Wilcox said.
“The decision to merge the OFT and Competition Commission is a positive first step in removing duplication and waste in the current process, which will importantly help free up business as well as government resource,” said Katja Hall, chief policy director at Britain’s CBI business lobby.
Edward Miller, a competition lawyer at Reed Smith, said the only benefits of a merger will be cost savings.
“Indeed, the government makes it clear in a number of respects that the previous respective functions of the OFT and CC will remain separate in the new structure. So why bother to have it?” Miller said.
Lawyers worry the CMA won’t have enough checks and balances as it will act as investigator, prosecutor and judge, missing up an opportunity to introduce a U.S. style system of having to make a case before an independent judge to impose sanctions.
More controversially, the government is proposing to remove the need for prosecutors to prove dishonesty in cartel offences.
Leading lawyers slammed the move, saying it was simply a way of making the trust-buster’s job easier after failing to make cartel prosecutions stick in the past.
Employees with no intention of flouting competition law could end up being prosecuted, legal experts said.
“This change lowers the bar to criminal prosecution, therefore giving rise to potential miscarriages of justice,” said Robert Bell, head of competition law at Speechly Bircham and chairman of the City of London Law Society Competition Committee.
Luke Tolaini, antitrust partner at Clifford Chance, said: “This is widening the goalposts in the hope that the OFT’s scoring record in criminal cases will improve. It does not seem quite right to do that when the OFT have not yet brought a single case before a jury.”
The proposals allow businesses to avoid liability by publishing details of an agreement in advance but that may not always be practicable, said Paula Riedel, a competition partner at Linklaters.
Lawyers welcomed the government’s decision to drop a proposal to levy fees on guilty companies in anti-trust probes but were dismayed that merger control fees will be bumped up.
The European Union’s executive European Commission remains the main competition authority for large mergers that involve a significant cross-border element. (Reporting by Huw Jones; Editing by Jon Loades-Carter)