Retailers and dairies paying fines totalling £116 million following an investigation by the Office of Fair Trading has put competition law at the top of the news agenda. While the OFT has acted quickly in securing a headline-grabbing result, Wragge & Co antitrust partner Bernardine Adkins says settling quickly could backfire.
Settlement agreements are increasingly fashionable with competition regulators. The European Commission in particular is consulting on a proposed settlement procedure, and it is likely that the OFT will wish to follow suit. In the UK and the EU, settlements thus far appear to entail an admission of breach of the relevant competition rules.
This will make companies more vulnerable to damages claims, where victims have to prove causation and loss rather than having to establish the substantive breach. While by no means of the scale of the triple damages claims in the US, they are increasingly a feature of the legal landscape.
We have seen the lead UK and EU regulators talk up the level of fines that will be imposed. The more the regulators up the ante (and the more they are naive in not understanding that there needs to be a level of reciprocity in any settlement), the more companies will wish to fight it out with the regulators.