OFT issues guidance on Competition Act procedures and extends trial of Procedural Adjudicator role

06 February 2013

Victoria Moorcroft

The OFT has issued updated guidance on its procedures for investigating potential infringements of the Competition Act 1998 (CA 98). The guidance incorporates some new processes, and provides for additional transparency.  In addition, it has extended the trial of the Procedural Adjudicator role until April 2014 (when all the OFT’s CA98 enforcement powers will transfer to the new Competition and Markets Authority).

The main changes introduced by the OFT are:

• introducing a three-person ‘case decision group’ which will take responsibility for a final decision on infringement and penalty;

• allowing parties to make representations not only on the substance of an infringement but also on the key elements of the OFT’s proposed penalty calculation;

• providing for more interaction between the parties and the decision-makers, with more interactive oral hearings and additional ‘state of play’ meetings; and

• publishing case opening notices and case-specific timetables on the OFT’s website.

The OFT says the revised guidance reflects learning from past cases, external feedback and international best practice, and indeed the changes do to a large extent reflect the practice of the European Commission.

In addition to issuing the new guidance, the OFT has also extended its trial of the Procedural Adjudicator role, which it introduced in March 2011. Indeed, the day after it published its guidance, the OFT also published another decision taken by the Procedural Adjudicator in July 2012. 

In that decision, the Adjudicator confirmed the OFT’s decision to proceed to issue a statement of objections (‘SO’) in respect of its investigation into online hotel bookings, together with an accompanying press announcement.  IHG, one of the recipients of the SO, argued that the timing, in the middle of July, was unreasonable, disproportionate, irrational and procedurally unfair because IHG was the Official Hotel provider to the Olympics and Paralympics. 

It argued that it would not have sufficient resource to focus on its response until after the Games, and that the announcement would have a disproportionate impact on its reputation. The Adjudicator considered whether the decision was unreasonable or irrational, whether the case team has respected the necessary procedural requirements and/or whether the party’s rights of defence have been respected. It concluded that the decision was sound - IHG could have requested an extension if it felt it was unable to fully exercise its rights of defence. Furthermore, the OFT was right not to take into account potential damage to IHG’s reputation when deciding whether to issue an announcement about the SO.

Other articles related to the EU & Competition Law Bulletin for February 2013: 

> European Commission imposes biggest ever fine on members of screen component cartel

> Court of Justice upholds AstraZeneca abuse of dominance decision

> Statement of Objections in Samsung standard-essential patent case

> Commission conditionally approves acquisition of Orange Austria by Hutchison 3G

> NCAs may take action against anti-competitive agreements which do not meet the thresholds in the Commission’s de minimis notice

> New guidelines in place for assessing State aid for the deployment of broadband

> European Commission accepts commitments in three investigations: Thomas Reuters, RioTinto Alcan, e-book publishers (and Apple)

> German Parliament Adopts Amendment to German Competition Law

> Federal Cartel Office prohibits chemicals traders joint venture previously cleared in merger control

> OFT clears Vodafone/Telefonica site sharing agreement

> OFT concludes that there are no grounds for action in respect of Cathay Pacific/Virgin Atlantic information exchange

> Health and Social Care Act: Competition Law Regime