DTI publishes report on competition and regulation in the automotive industry

In January last year, the DTI commissioned Frontier to undertake a study of the impact that Government regulations have on competition in the automotive industry. The study was intended to contribute to the Government's competition and regulation agenda, providing information on how regulations can affect competition in general terms, by analysing the effects in one industry. On the basis of our analysis, we were asked to make recommendations with regard to (i) whether any existing or proposed regulations affecting the automotive industry raise competition concerns and (ii) the lessons that can be learned with regard to how the competition effects of future regulations can best be identified. Our report to the DTI has now been published on the DTI's website. In it we conclude that, of the multitude of regulations affecting the automotive industry, only a very small number have the potential to affect the way in which firms compete and only one raises a potential competition concern. We have suggested that the OFT and the DTI may want to look in more detail at the effects that regulations concerning London taxis have on competition in that market.With regard to assessing the competition effects of new regulations, we make a number of recommendations. Perhaps the most significant is that the approach taken by government departments to collecting information with regard to the impact that a regulation might have on businesses affected (used to inform Regulatory Impact Assessments) is not sufficient to allow an analysis of competition effects, even at a relatively general level. We recommend that more information will need to be collected by departments, and more analysis of that information undertaken, in order to apply the new Guidelines for Competition Assessment that have been produced by the OFT.Click here to connect to the full report and summary. To read Frontier's recent bulletin "Worried about competition", click here.