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JANUARY 2013
Legal Focus
move towards enabling businesses to understand what is on the OFT's agenda.
Other innovations in the guidelines may appear mainly of interest to competition law specialists, but will be important both for companies under investigation and complainants. The OFT is seeking to improve its operation of "oral hearings", a quasi-formal hearing at which parties defend themselves against the OFT's provisional findings in its "Statement of Objections". Hearings have in the past often been viewed as ineffectual – under the new procedures the parties have a chance to make their arguments directly to the Case Decision Group.
The OFT offers more openness generally through so-called "State of Play" meetings at regular intervals to keep parties informed of the OFT's current thinking. These meetings are already a welcome part of the OFT's merger investigation processes. In addition, the OFT's experiment with a Procedural Adjudicator to deal with procedural disputes has been extended to last the remainder of the OFT's lifetime.
do you think they go far enough?
The procedural reforms have been the subject of much debate amongst competition law practitioners. A key backdrop was the Government's consultation last year on potentially very radical reforms of UK competition law procedures, including an option of requiring the OFT's successor the CMA to go to court to prove all antitrust decisions, rather than reaching a decision through its internal processes that can then be appealed.
The Government was clearly strongly tempted by the court-based model, which mirrors procedures in countries such as the USA and Australia. It is generally acknowledged that reform of OFT procedures was necessary for the OFT/CMA to avoid substantial judicial constraints on its decision-making.
In that light, if we are to stick with essentially the same "administrative" process for antitrust enforcement, the measures are undoubtedly very welcome and should add significantly to the robustness of OFT decision-making. Whether they achieve the OFT's other objective of speedier decisions is much more doubtful, especially given the resource constraints the OFT will face in putting together a Case Decision Group on every case.
What will be the main effects of this on business in your country?
The guidelines undoubtedly aim to achieve a more efficient system, which is in the interests of all businesses committed to competition. The OFT clearly hopes that its decision-making record will improve.
A key criticism in the Government consultation last year was the lack of decisions from the OFT, with the result that the UK decided fewer cases than countries such as Slovenia, whilst France, Germany and Italy each decided almost five times as many cases. Whether an uptick in UK decisions would represent an enhanced enforcement regime or an unwarranted extension of regulatory interference in a generally compliant economy is for the individual to decide, but a more proactive and well-run OFT must surely in principle be in the best interests of competition.
Have there been any recent cases that have had an impact on competition enforcement in the UK? If so, please explain.
As noted above, an issue in UK enforcement has been the lack of decided cases. However, when the OFT has reached decisions it has suffered a series of embarrassing setbacks on appeal. The dismantling of the OFT's cartel case against over 100 construction companies; the judgment that OFT findings in the tobacco cartel did not support its decision; the collapse of the criminal case against British Airways executives. These are just some examples of cases suggesting that the OFT needs to improve its efficiency in those cases where it does make decisions.
Is there anything else you would like to add that you feel our readers may be interested in?
The new OFT guidelines and the advent of the CMA are important developments, but equally significant are the Government's proposals to promote enforcement of competition by companies bringing claims in the court. Together they promise increased competition scrutiny on businesses, bringing with it increased compliance risk. LM
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