Member Article

OFT rules change around Competition Act

Laws surrounding business competition were changed today by the Office of Fair Trading (OFT), in a procedural reform that will strengthen current regulations.

The Competition Act of 1988, which hoped to ensure fair and open competition within business, has been modified to become more efficient and robust.

Infringement and penalty cases being reviewed by a collective within OFT will be decided by a three person case group, while organisations that have been issued with a financial penalty will be able to put representation forward against key points before action is taken.

The changes will open up a dialogue between OFT and those they are investigating through oral hearings, and cases will be published through open notices to improve transparency.

Jackie Holland, OFT Senior Director of Policy, said: “Our updated Competition Act procedural guidance reflects the lessons we have learnt from past cases, external feedback and international best practice.

“We believe these changes will enhance the robustness and efficiency of our Competition Act cases, as well as resulting in better interaction with parties to investigations and improving the transparency of our work.”

Bruce Kilpatrick, who is a law partner at Addleshaw Goddard, has been following the competition changes closely.

He commented on how changes to collective decision making will be reassuring to different parties involved in OFT proceedings.

He said: “This change will increase parties’ confidence in the OFT’s decision making as there will be the assurance of meaningful fresh scrutiny of the provisional decision of the OFT, which it sets out in its Statement of Objections.

“The OFT’s changes also promise more transparency and better engagement with the OFT for businesses under investigation.”

Greater clarity and earlier notifications from the OFT before final decisions are made will also be helpful, according to Mr Kilpatrick.

He added: “This would have made a difference in the construction investigation, for example, where the OFT’s penalties calculation was only really scrutinised on appeal by the Competition Appeals Tribunal.

“However, the extent of consultation and timing for a debate on fines is crucial as it inevitably will change the focus of both the OFT and the companies being investigated from whether an infringement has taken place to the penalty.”

Mr Kilpatrick concluded: “The introduction of a new decision making team who will look at the case afresh is likely to put new life into oral hearings, which have historically been somewhat frustrating both for parties and for the OFT.

“It will now be a really meaningful step in the investigation process and an opportunity for a frank exchange of views on the merits of the OFT’s case and the evidence which underpins it”.

The OFT regulation changes announced on Tuesday were informed by a month long consultation period over April 2012.

This was posted in Bdaily's Members' News section by Miranda Dobson .