The ‘Big Four’ accounting firms are commercial organisations par excellence. And they are highly successful. They could be the poster children for globalised capitalism in the Twenty-first Century.
In that capacity, from time to time, their collective strength in certain product markets engages the attention of the competition authorities – as it did, for instance, in the UK Competition Commission’s inquiry into statutory audit services.
But competition law is about preventing the abuse of commercial power, and public law is about preventing the abuse of governmental power. These legal disciplines come from the opposite ends of the public-private spectrum. Are there any circumstances in which an organisation as intrinsically commercial as a major accounting firm can also be regarded as a public body and subject to the requirements of public law?
This was the question addressed by the Divisional Court in R (Holmcroft Properties) v KPMG. The case is revealing as to the courts’ approach to applying public law in a complex public-private environment, and in particular their failure to form a coherent view of how regulation operates.