The Office of Fair Trading ("OFT") is consulting on new guidance on how it conducts investigations into potential breaches of competition law. The guidance sets out how the OFT handles the various stages of a Competition Act 1998 investigation, from the opening of a case through to the final outcome and aims to rectify complaints that its handling of investigations is not sufficiently transparent.
The new guidance updates and expands existing publications and aims to provide businesses and their advisers with more clarity. In particular, the guidance sets out how the OFT applies its prioritisation principles in order to determine whether to take a particular case forward. It also sets out how the OFT applies its internal procedures to test the legal, factual and economic arguments of a particular case as the investigation develops (to ensure decisions are well-founded, fair and robust). The OFT states that it will provide case updates to companies under investigation (as well as formal complainants) to keep them advised of progress.
The draft guidance proposes two new initiatives aimed at encouraging complainants to submit 'good quality' complaints about potential breaches of competition law. The OFT is proposing:
- to offer potential complainants informal non-binding discussions before they submit a written substantiated complaint. On this basis the OFT hopes to inform complainants at an early stage whether it would be likely to investigate the matter further were a formal complaint to be made. This should assist potential complainants in deciding whether to commit the time and effort in preparing a full complaint; and
- to reach a decision on whether to formally open a case within four months of receiving a full complaint. This four month commitment is subject to the amount and quality of the information provided and the co-operation of the complainant.
Whether the OFT will take a case forward will still depend on whether it falls within the OFT's casework priorities (for example whether the likely benefits to consumers are sufficient and whether the case is strategically significant).
OFT Senior Director of Policy, Cavendish Elithorn, stated that "by offering informal discussions on potential complaints and consistently faster decisions about whether to open an investigation, we hope to encourage and enable firms to come to us with legitimate, well argued cases."
The OFT highlights that the guidance does not extend to investigations by sectoral regulators using their concurrent powers.
The consultation runs until 12 November 2010.
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