On 16 October 2012 the Office of Fair Trading (“OFT”) issued revised procedural guidance for the determination of cases under the Competition Act 1998 (“CA98”). The new procedural guidance promises to streamline the way in which competition cases brought by the OFT in relation to anti-competitive agreements or abuses of dominance are assessed and determined and how corresponding penalties are decided. The OFT hopes these guidelines will promote transparency and increase business confidence in the investigation process.

The CA98 case procedure will be overseen in stages by three distinct entities within the OFT.

  1. Senior Responsible Officer: Up to and including the issue of a Statement of Objections (“SO”) against the parties, cases will be run by the Senior Responsible Officer (“SRO”), in consultation with senior OFT officials, the OFT’s General Counsel and its Chief Economist. The SRO will decide whether there are grounds to issue an SO and he will consider possible terms of any settlement with the parties both before and after the issue of the SO.
  2. Case Decision Group: Upon the issue of the SO a Case Decision Group (“CDG”) will be appointed. The CDG will be specifically formed for each case by the OFT’s Policy Committee (see below). The CDG, which will contain at least one lawyer, will be entrusted with making a final decision on infringement and any financial penalty being imposed after hearing representations from the parties.
  3. Policy Committee: The CDG will, in turn, be entitled to consult the Policy Committee on any legal, economic or policy issues to arise generally out of a proposed decision. The Policy Committee will incorporate senior officials, General Counsel and the Chief Economist but their consulting role will be limited to providing views, and not extend to advising on the strength of the evidence in a case.

The new procedural model is designed to reduce the scope for “confirmation bias”. Parties subject to an investigation often complain that where the OFT acts as, effectively, prosecutor, judge and jury it can tend to re-endorse decisions at previous stages by default. By keeping official separation of personnel and expertise at different stages, the OFT hopes to increase the integrity of enforcement processes. The division of decision-making powers at various stages in cases is likely to be carried forward into the Competition and Markets Authority, the new unitary competition regulator which will unify the OFT and Competition Commission within one body in early 2014.

Other changes to OFT procedures under the revised guidance include the following:

  • The parties will have the opportunity to make both written and oral representations on the OFT’s penalty calculations to the CDG prior to their imposition. The draft penalty statement will not be set out in the SO but will be issued after consideration of the parties’ representations on the SO, setting out the key aspects of the calculation and the reasoning behind it. The parties can make written submissions in relation to the draft penalty, and/or request an oral hearing, to take place in person or on the telephone within 10 to 20 working days of the deadline for making written representations;
  • Increased use of oral hearings for the parties to discuss an investigation with the decision makers and to attend “state of play” meetings;
  • Case opening notices and administrative timetables for each case to be published on the OFT’s website, so as to make procedures more transparent.

In addition to the revised procedural guidance, the OFT has also confirmed the continuation for another year of the trial appointment of a Procedural Adjudicator, who is tasked with swiftly resolving disputes between the parties and the OFT as to the conduct of cases.