The government has proposed several reforms to UK competition law in its Deregulation and Contracting Out B ill which was published on 19 January.Key plans include extending the scope of undertakings which can be given to avoid a merger reference to the Monopolies and Mergers Commission (MMC); allowing undertakings to be given to avoid a monopoly reference to the MMC; and streamlining procedures under the Competition Act 1980 and the Restrictive Trade Practices Act 1976 (RTPA).The Companies Act 1989 introduced the possibility of giving undertakings to the secretary of state to avoid a merger reference to the MMC.

Such undertakings were limited to structural matters, such as a promise by the buyer to sell parts of an acquired company.

They have been accepted in several cases, including Rank/Mecca and Redland/Steetley.It has not, however, been possible to give undertakings as to future conduct of the merged entity, such as pricing policy, before an MMC investigation.The proposed amendments to the Fair Trading Act 1973 (FTA) will allow the secretary of state to accept undertakings in relation to a wider range of matters, including pricing, terminating specified agreements, and commitments not to withhold specified supplies or services.

This will provide a possible short cut to avoid a lengthy and expensive MMC investigation.In a separate statement, the corporate affairs minister announced, on 19 January, that the 'assets test' for mergers qualifying for an investigation by the MMC is to be increased from £30 million to £70 million from 9 February.

The £30 million figure has not changed since July 1984.The increase will reduce the numbers of mergers qualifying for investigation by the MMC.

In practice, however, the 'market share' test is more important, since it generally gives a better indication of the impact of the relevant merger on competition.It has also been suggested that the maximum time limit on announcing a reference to the MMC for investigation of a completed merger which has been made public should be cut from six to four months.

This would be implemented by an order made under the proposed order-making powers contained in the Bill.The Bill also proposes that undertakings be permitted as an alternative to a monopoly reference, ie an investigation by the MMC into the supply of particular goods or services, such as compact discs or fine fragrances.

Again, such undertakings may save the time and expense of an MMC investigation.

However, since a monopoly investigation may be mounted in relation to a 'complex monopoly' involving several suppliers (for example, the perfume houses), it may prove difficult in practice for the secretary of state to negotiate undertakings with all the suppliers involved.The Bill proposes to remove the requirement for a formal investigation and report by the director-general of fair trading (or the appropriate industry regulator) before a reference can be made to the MMC to investigate a possible anti-competitive practice, or undertakings accepted as an alternative to such a reference.This proposal will implement one of four measures announced in April 1993, following the green paper in November 1992 on abuse of market power.

It should improve the Competition Act's effectiveness, but it still leaves the victims of abuse of market power without a direct remedy (such as a right to claim damages for past conduct) unless they can show a sufficient effect on international trade to allow them to pursue remedies under the laws of the European Union and/or European Economic Area.

The Bill will not implement the other measures announced in April 1993: in particular, it will not strengthen the we ak investigatory powers of the UK authorities.Although a white paper in 1989 proposed to replace the highly technical Restrictive Trade Practices Act 1976 with a system based on art 85 of the Treaty of Rome, these proposals have not been adopted.

The government has chosen instead to make piecemeal changes to the RTPA.

The Bill proposes two refinements to the RTPA.The first proposal is to introduce a new category of agreements, called 'non-notifiable agreements', which will be defined by orders to be made by the secretary of state from time to time.

Particulars of such agreements will not, in general, need to be furnished to the Office of Fair Trading (OFT).

They may be defined, for example, by reference to the turnover or market share of the parties (which suggests that a de minimis threshold may be applied to the RTPA for the first time), or to European Union exemptions or decisions (which indicates that block exemptions - which exempt specified categories of agreements from art 85(1) of the Treaty of Rome - may for the first time be used in relation to the RTPA).

'Price-fixing agreements' (those which include restrictions as to prices to be charged, quoted or recommended for particular goods or services, or which involve the exchange of information as to prices) will not be 'non-notifiable agreements'.If these changes significantly reduce the number of agreements needing to be supplied to the OFT, they will be well received by practitioners and their clients.A further welcome development is the proposal to increase the use of the special section of the register of restrictive trading agreements by widening the range of commercially sensitive information which may be withheld from the public register.The existing provisions allow only very limited categories of information to be withheld from the public register.

The Bill proposes to permit the secretary of state to allow information to be withheld where, in his opinion, such information is not such that 'publication is...in the public interest' and its publication would 'substantially damage the legitimate business interests of any person'.This should reduce one of the major concerns of the parties to registrable agreements, namely that parts of their agreements which they quite legitimately regard as confidential will be open to public scrutiny.Each of these proposals is a welcome adjustment; the real issue, however, is whether such fine tuning is what is required, rather than the radical reforms of UK competition law which many, including the government itself, have previously proposed.