Competition commitments

10 August 2022
Next in our series of legal blogs, we’re taking a look at our role in enforcing competition legislation.
Katherine Brownstein
Katherine Brownstein
Senior Legal Adviser
Cover Image
Train driver

Ever wondered about ORR's role as an enforcer of competition legislation, in conjunction with the Competition and Markets Authority (a ‘concurrent competition enforcer’) for the rail sector? And specifically about the use of commitments in competition investigations? 

Our remit

ORR is one of a number of sectoral regulators that has powers to enforce competition law concurrently with the Competition and Markets Authority (CMA). 

What that means is that (here is the techy part), since 2014 when the CMA was created, under s.67 of the Railways Act 1993 we can run market studies and market investigations using powers derived from Part 4 of the Enterprise Act 2002, and we have wide information gathering powers which allow us to do so.  

Our powers

These apply to the supply of services relating to railways. We have broad scope for exercising these concurrent competition powers. 

We can also investigate companies for breach of the Chapter I and Chapter II prohibitions under the Competition Act 1998.

Chapter I prohibits agreements between undertakings that have as their object or effect the prevention, restriction or distortion of competition within the UK. Chapter II prohibits the abuse of a dominant position within a market that may affect trade within the United Kingdom. 

We have issued some guidance on how we use our competition powers. Within this there are a number of options available to us in terms of decision-making during a case. One of the options we have is to accept binding commitments from a party under investigation. 

You tend to hear about commitments quite a lot, especially in competition cases run by sector regulators. So let’s look into this option in a bit more detail.

What are these commitments? 

These are binding promises given by the party under investigation in relation to its future conduct. The party will promise to do, or not to do, one or a number of things, and in turn, the regulator will drop its case against them. 

When considering accepting commitments in a competition investigation, we follow a formal procedure that includes running a public consultation. And we have to be satisfied that the commitments offered by the party under investigation address the competition concerns which we have. 

Interestingly, though, the party does not admit any wrongdoing by offering the commitments. And we are not concluding that we have found any competition breaches when making a decision to accept commitments. But they do offer a useful and practical way for competition authorities to rectify potential problems within a market in many circumstances. 

Case study - Rail Assessment Centre Forum

We recently concluded a competition investigation in commitments. This investigation was opened in March 2021 on the basis that we had reasonable grounds to suspect that the Rail Assessment Centre Forum (RACF), an organisation which provides psychometric assessment centres for train drivers across the rail industry, had breached Chapter I of the Competition Act 1998 in relation to its rules of membership. 

The commitments were offered by RACF and provided an efficient way of addressing our competition concerns and bringing the case to a close. This is an effective way for regulators to make use of sometimes limited resources, whilst also ensuring that outcomes for consumers in markets are prioritised, and competition continues to be enforced effectively.