The OFT and CC operate independently. The OFT is responsible for antitrust investigations under the Competition Act and for conducting initial merger and market study inquiries. It passes the most serious cases on to the CC for further investigation and for consideration of the remedies required to eliminate any perceived risk of substantial harm to competition.
The Government is announcing a raft of changes to public sector bodies and agencies and the merger of the two bodies forms part of a process that has been dubbed the 'bonfire of the quangos' by commentators.
A Government statement said that the move was aimed at "improving efficiency and increasing clarity of Government work. These proposals are part of the Government-wide work to increase the transparency and accountability of Public Bodies, announced by the Minister for the Cabinet Office this morning," said the statement.
The plan has been energetically welcomed by the OFT. A more muted CC statement said that it looked "forward to working with all concerned to build a new, strong, competition authority combining the best of the Competition Commission and Office of Fair Trading".
"We have advocated the merger of the Competition Commission with the OFT for some time," said OFT chief executive John Fingleton. "With the right design, a single competition and markets authority can deliver better, faster results for consumers and the economy, and greater consistency for businesses."
The merged competition authority will take over the OFT and CC's duties in assessing whether or not companies are breaking competition law when they merge or when one company buys another, as well as when they collude in their behaviour.
"This new body would be responsible for merger regulation, market investigations, cartel and antitrust cases, as well as a number of functions with respect to the regulated utilities," said the Government statement. "The move is designed to strengthen the competition regime, streamlining procedures, making it less burdensome and delivering cost savings. A final decision will follow a full public consultation in the New Year."
"Consumers are represented by a bewildering array of public, private and voluntary bodies, which often duplicate efforts to inform, educate and advise consumers of their rights," said Business Secretary Vince Cable. "Our aim is to create a simpler structure with a single competition authority and a stronger role for front-line consumer services."
The Government will propose that consumer enforcement related to competition law and consumer protection will be moved so that it falls under the control of local trading standards offices.
Government-run advisory service Consumer Focus and other consumer bodies will be placed under the control of the Citizens Advice service, the Government said.
Consumer protection organisation Which? said that it worried that putting local offices in charge of some enforcement will weaken public powers to take on major private interests.
"These changes also raise questions about moving responsibility for national enforcement to dedicated individual Trading Standards authorities," said Which? chief executive Peter Vicary-Smith. "How will a local Trading Standards have the resources or the expertise to take on national companies such as the big banks, the airlines and the supermarkets?"
The OFT's Fingleton echoed some of those concerns about the power of local enforcement to act against companies which were active on a national scale.
"Today's proposals raise important questions about how local and national enforcement of consumer law should best be structured to ensure markets work well for consumers," he said. "With a growing proportion of household goods and services purchased from national or global companies, and increasing online sales, the details will need to be carefully thought through in the light of the issues, risks and evidence."
Which? said, though, that the changes could improve national competition law enforcement.
"The merger of the Competition Commission offers the opportunity to strengthen competition regulation in the UK, but this will only happen if the new body is given the resources it needs to match its task and police markets effectively," said Vicary-Smith.
Industry representative body the CBI said that it welcomed the merger of the two authorities, and that it was something that it had previously called for.
"The planned merger would improve the efficiency of the competition regime by cutting duplication," said Matthew Fell, CBI director of competitive markets. "It would also benefit businesses by speeding up merger reviews and market investigations, reducing the time firms are left in limbo."
Most European countries operate have just a single tier of competition regulation and enforcement, such as that now proposed by the Government. The European Commission uses a two-stage investigation process and uses separate investigation teams for the two phases of its investigations.
The changes will require new legislation, and some observers have suggested that this could encourage the Government to make other changes to competition law, such as changes to the merger thresholds currently in place.
