On 16 October 2012, the Office of Fair Trading (OFT) published the final guidance on their new procedures for investigating suspected breaches of UK and EU competition law. These procedures have largely adopted the comments that were made as part of the public consultation process launched in March 2012.
The UK's competition regime has been criticised on a number of fronts, including the length of cartel investigations, perceived 'confirmation bias' by the OFT, and the low number of decisions taken in comparison to other EU Member States. As a result of this, the OFT has published this new guidance, clarifying and enhancing the existing administrative regime for investigating and enforcing cases.
The new guidelines
The new guidelines are aimed at increasing the speed and robustness of the competition investigation process, as well as increasing engagement with parties involved. The key changes to the existing regime are:
- The introduction of a Policy Committee which will include members of the OFT's senior staff, including the Chief Executive and other executive members of the OFT Board, the Chief Economist, the General Counsel and the Senior Director of Policy. The Policy Committee will oversee and scrutinise the development of OFT casework, guidance, procedures and policy.
- A revised decision making model, whereby a three-person Case Decision Group (CDG), appointed by the Policy Committee, will be the decision-makers in the case following the issuance of a Statement of Objections. The CDG, consisting of senior staff who are not already involved in the investigation, are responsible for determining whether to issue an infringement or 'no grounds for action' decision and the appropriate amount of any penalty. With regards to penalties, any written and oral representations on the Statement of Objections must be considered by the CDG. To prevent potential prejudice by the CDG, their role will not extend to making decisions on settlement, the imposition of interim measures and commitments. Such decisions will remain with the Senior Responsible Officer with approval from the Policy Committee.
Changes to procedural rights during an investigation, including: ◦extending the role of the Procedural Adjudicator;
- introducing the right for parties to make oral representations to the decision makers;
- additional 'state of play' meetings between the OFT and the parties; and
- more checks and balances throughout the processes.
- Enhanced transparency of the OFT's portfolio of open investigations through the publication of Case Opening Notices, giving details of on-going cases following the opening of a formal investigation.
In addition, the Enterprise and Regulatory Reform Bill (the "ERRB"), which is currently before Parliament, provides for the Competition and Markets Authority's (the "CMA") management to determine the appropriate decision making structure for the CMA. The ERRB also includes a power for the Secretary of State to impose time-limits on investigations and the obligation for the Secretary of State to review the competition regime and report its findings to Parliament.
The OFT's Senior Director of Policy, Jackie Holland, commented that:
"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."
Though yet to be tested, each of these steps represents a welcome enhancement of procedural safeguards ? although it remains to be seen whether the OFT is able to adhere to timetables for the first time when undergoing extensive changes to its internal decision-making processes. In particular, the expansion of the role of the recently introduced 'Procedural Adjudicator' provides a valuable quasi-independent individual to hear procedural disputes, bringing it more in line with that of the hearing officer in EU cartel cases.