How can regulatory authorities determine in practice whether or not alliance partners are engaging in anti-competitive practices?

Question

What will be an ideal response?

Answer 1

There are explicit requirements in respect of annual performance reporting, especially the need to
identify financial results attributable to each partner, hence consolidation of data must provide a fair
and accurate view of each enterprise for the respective shareholders. Beyond that, regulatory
authorities in the UK rely particularly on complaints made initially to the Office of Fair Trading
(OFT) by aggrieved parties such as competitors, customers, trade unions on behalf of staff,
individual ‘whistle-blowers’ etc. Once substantive complaints have been received formal
investigations can begin, for example by referring the matters to the Competition Commission or
industry regulators such as the Financial Services Authority (FSA), OFTCOM, OFGEN etc. who
have powers to investigate thoroughly as they see fit. However, covert activities may be extremely
hard to substantiate sufficiently to prompt formal investigation. The costs of such regulation to
enterprises, their owners and clients have to be balanced against the risks and consequences of
malfeasance in particular sectors. The banking industry is highly regulated but has still caused much
concern over many of its practices leading to the 2008 credit crisis. Indeed, at the time of writing
little seems genuinely to have changed.