Monopolies Commission (Hansard, 7 February 1955)

§ 5. Mr. Dodds
asked the President of the Board of Trade how many reports have, so far, been received by him from the Monopolies Commission; and to make a statement giving details showing what action he has taken designed to reduce prices or improve quality resulting from the reports.

§ 20. Mr. Chetwynd
asked the President of the Board of Trade to publish a complete list of all subjects referred to the Monopolies Commission, showing the date submitted and, where appropriate, the date reported to him, together with the main recommendations in each case and the action taken on these recommendations.

§ Mr. P. Thorneycroft,
pursuant to his reply [OFFICIAL REPORT, 3rd February, 1955; Vol. 536, c. 1246], supplied the following information:
The supply of dental goods Referred 1.3.49; Report received 3.11.50; Report published 14.12.50.
Commission's main recommendations

(i) Almost all the undesirable practices in the industry rested for their enforcement on "exclusive dealing" and "collective boycott," and these devices should be prohibited.

(ii) The Association of Dental Traders and Manufacturers (A.D.T.M.) should review their rules, regulations and policy (and their members should review certain prices and terms of sale) and make the changes necessary to meet the Commission's other criticisms.
Action taken

(i) The Monopolies and Restrictive Practices (Dental Goods) Order, 1951—S.I. 1951, No. 1200—made exclusive dealing and collective boycott unlawful.
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(ii) The A.D.T.M. (now called the Association of British Dental Traders) have reviewed their rules to preclude the Association from enforcing or procuring a collective boycott and to give effect to other changes recommended by the Commission. Prices of some goods were reduced by manufacturers shortly after publication of the Commission's report; and a minor restrictive agreement concerned with burs and operated by one firm was brought to an end.
The supply of cast iron rainwater goods Referred 1.3.49; Report received 17.2.51; Report published 4.4.51.
Commission's principal recommendation Exclusive dealing provisions embodied in "Rainwater Agreements," whereby signatory manufacturers and merchants undertook to deal only with each other, had various undesirable restrictive effects; and those concerned should modify their trading arrangements in such a way as to remove these.
Action taken New trading arrangements taking account of the Commission's criticisms were introduced on 1.1.52.
The supply of electric lamps Referred 1.3.49; Report received 4.9.51; Report published 13.11.51.
Commission's principal recommendations The Commission did not recommend that the fixing of common manufacturer's prices should be prohibited, on condition that the exchange of technical knowledge should extend to all manufacturers within the common price system, and that the prices should be reasonable. Amongst other safeguards recommended were:

(a) E.L.M.A. members who supplied components should make them equally available to all manufacturers without discrimination in price against non-members;

(b) The E.L.M.A. "controlled companies" should continue to provide competition by supplying cheap lamps, and should not be used as "fighting companies" against independent manufacturers;

(c) Sales quotas should be ended, as should quality and quantity restrictions for lower-priced lamps;

(d) The collective enforcement of resale price maintenance, and "exclusive dealing" and ancillary arrangements about rebates and other payments, should be ended.
Action taken The Government accepted all the Commission's recommendations except one calling for the abolition of aggregated quantity rebates on which they preferred to reserve judgment, and E.L.M.A. took action to bring their arrangements into conformity with the Government's conclusions.
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The supply of insulated electric wires and cables Referred 1st March, 1949; Report received 25th April, 1952; Report published 1st July, 1952.
Commission's principal recommendations

(i) Prices of mains, telephone and submarine cable bought by very large buyers (e.g. the British Electricity Authority and the G.P.O.) should continue to be based on cost investigations. Prices to smaller buyers should bear a direct and reasonable relationship to the prices so fixed.

(ii) The common price system for other cables (rubber cable and covered conductors) should be ended, but the Association should be allowed to fix minimum prices, giving no more than a reasonable profit to the lowest cost producer of each type of cable.

(iii) Provision should be made for the continuance and development of efficient independent competition in the purchase of land telephone cable by the G.P.O.

(iv) All quota arrangements should be ended, as should exclusive dealing, aggregated quantity rebates and rebates to members of certain associations.
Action taken The Associations have undertaken to bring their arrangements into conformity with the Commission's conclusions, save for two minor ones which the Government felt unable to endorse. The General Post Office is taking action to give effect to (iii) above and the attention of the British Electricity Authority has been drawn to the Commission's conclusions on mains cable.
The supply and export of matches and the supply of match-making machinery Referred 1.3.49; Report received 3.10.52; Report published 13.5.53.
Commission's principal recommendations The Commission found that monopoly arrangements existed which were against the public interest, arising principally out of the agreements made between the British Match Corporation and the Swedish Match Company. In view of certain advantageous features of these agreements, the Commission did not, however, consider that it was justified in making recommendations which would involve a serious risk of their being broken. To mitigate some of the objectionable effects of these arrangements, the Commission's principal recommendation was the introduction of price control on matches. Other recommendations concerned the prices charged for match-making materials, acceptance of amendments to the agreements proposed by the British Match Corporation to remove certain of its restrictive provisions and the lodging with the Board of Trade of details of changes in the agreements and of any new agreements.
Action taken The Government accepted all the recommendations of the Commission except that relating to price control. They secured the 180W cancellation of the agreements between the British Match Corporation and the Swedish Match Company. A new agreement has now been signed from which objectionable features of the previous agreements have been eliminated, in particular the quota and compensation clauses and the provisions for sharing the British market between the two companies in stated proportions, and restrictions upon the manufacture and supply in the United Kingdom by the Swedish Company of matches, match-making materials and match-making machinery. The price at which Swedish matches are to be sold by the British company is now to be decided by the Swedish company.
The supply of insulin Referred 12.12.50; Report received 7.8.52; Report published 28.10.52.
Commission's principal recommendation The Commission found that the arrangements made by the insulin manufacturers, individually and collectively, operated in the public interest and did not recommend that any of them should be discontinued.
The process of calico printing Referred 16.4.51; Report received 28.11.53; Report published 14.4.54.
Commission's principal recommendations The Commission recommended the ending of:

(i) compulsory minimum price arrangements;

(ii) a supporting "percentage quantum" scheme;

(iii) compulsory uniform terms and conditions of trading;

(iv) a compulsory rental scheme for the engraving of certain new designs;

(v) arrangements designed to limit the capacity available for calico printing.
Action taken The Government are considering this report and the views which the industry and the Cotton Board have submitted. A statement will be made in due course.
The supply of imported hardwood and softwood timber and plywood Referred 8.10.51; Report received 27.7.53; Report published 27.10.53.
Commission's principal recommendation Exclusive dealing" undertakings binding traders whose names appear on "Approved Lists" to deal only with each other shall be abrogated and not be replaced by any other arrangements or undertakings having similar effects.
Action taken The constituent sections of the Timber Trade Federation of the United Kingdom have abrogated the agreements and undertakings by traders on the "Approved Lists" to deal only with each other.
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The supply of buildings in the greater London area Referred 27.3.53; Report received 19.6.54; Report published 27.9.54.
Commission's principal recommendations The Commission recommended that the two practices which it had been asked to investigate—the communication of the amount of proposed tenders to third parties by agreement or arrangement and the adjustment of the amount of proposed tenders by agreement or arrangement with third parties—should be brought to an end.
Action taken The London Builders' Conference has abandoned the practices criticised by the Commission. Firms will not be included in any list of approved Government contractors for new buildings if in tendering for such work they follow these practices. The attention of the associations of local authorities is being drawn to the report and the action taken.
The supply and export of semi-manufactures of copper and copper-based alloys Referred 12.12.50; Report received 22.1.55. The original reference called for a report on the facts only. The Commissions Report was received on 21st April, 1953, and on 15th July, 1953, it was asked to extend this investigation to the bearing of the facts on the public interest.
The supply and export of electrical and allied machinery and plant Referred 4.4.52.
The supply and export of pneumatic tyres Referred 19.9.52.
The supply of hard fibre cordage Referred 31.7.53.
The supply of linoleum. Referred 3.9.53.
The supply of sand and gravel in central Scotland Referred 24.12.53.
The supply of certain industrial and medical gases Referred 1.2.54.
The supply of standard metal windows and doors Referred 24.2.54.
The supply of certain rubber footwear Referred 9.4.54.
The supply of electronic valves and cathode ray tubes Referred 4.12.54.
Inquiry under section 15 The Commission also has before it the Board of Trade's requirement, sent to it on 17th December 1952, for a report on the general 182W effect on the public interest of certain widely prevalent discriminatory practices. The above statement summarises information about the principal recommendations of the Monopolies Commission on matters referred to it; and sets out briefly the action taken to implement these recommendations. Fuller details of the recommendations and of the relevant Ministerial statements—together with an account of the work of the Monopolies Commission—will be found in the Annual Reports by the Board of Trade on the operation of the Monopolies and Restrictive Practices Acts, published annually since 1949.