The OFT has published its Annual Plan setting out its high level priorities for 2010 -11. On the competition side, a continuing key priority is to focus on high impact enforcement of the competition rules. The OFT warns that this will include maximising the impact of corporate sanctions (such as increasingly high penalty fines) as well as sanctions on individuals (such as director disqualifications and criminal prosecutions).
Philip Collins, OFT Chairman, expressly refers to the pitfalls of 'short-term policy fixes' which he considers risk longer-term damage to consumers, markets and the UK economy. He has committed to engage with Government in the coming year in order to demonstrate the virtues of competition and influence Government policy to avoid unnecessary interventions in markets (a theme which has also been picked up by Competition Commissioner Almunia in recent months at an EU level).
The OFT is also seeking to minimise unnecessary regulatory burdens on business resulting from its own interventions, particularly as these are typically passed on to consumers in the form of higher prices, lower quality or reduced choice. It states it will take a proportionate, pragmatic and balanced approach to compliance, deploying its competition tools flexibly to achieve the best market outcomes.
A new short-form opinion procedure is also to be trialled. This will provide guidance to businesses on novel or unresolved issues in relation to horizontal agreements. The OFT acknowledges that businesses are often reluctant to enter into agreements with competitors even where there may be overall pro-competitive effects, given the lack of specific guidance in this area. Under its new discretionary procedure, the OFT is to publish a brief opinion on its website which will be based on (and limited to) the information provided to it by the parties.
The OFT further refers to an ongoing 'organisational agility' project aimed at streamlining the OFT's internal procedures for Competition Act 1998 cases, which will be a priority in the coming year and which may lead to Competition Act cases taking less time to complete.
Given the current financial climate, and along with other public bodies, a key objective for the OFT is to do 'more for less' through increased efficiency and faster delivery. Over the period 2008-09 to 2010-11the OFT's budget will be reduced by 15%.
In light of its reduced budget, the choice of cases to take forward is going to be of critical importance for the OFT in the coming year - particularly if the OFT is to achieve the desired high impact enforcement of the competition rules as well as wider educational and deterrence effects.
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