[authors: Philip Bentley, QC, Andrea L. Hamilton, and David Henry]
UK antitrust regulator issues revised antitrust guidance. The OFT introduces increased transparency, more active participation and greater checks and balances into antitrust proceedings.
On 16 October 2012, the United Kingdom’s antitrust regulator, the Office of Fair Trading (OFT) released an updated version of its guidance on procedure in competition cases (the guidance). The guidance sets out new decision-making processes and measures to enhance the transparency of investigations and increase the involvement of parties at an early stage. In the same vein as the European Commission’s manual of procedure for the application of Articles 101 and 102 of the Treaty on the Functioning of the European Union, the guidance provides details relating to the way the antitrust regulator conducts its investigations into suspected competition law infringements under Chapters I and II of the UK Competition Act 1998 (CA98).
Following a consultation process initiated in March 2012, the guidance on CA98 procedures builds upon previous guidance published by the OFT in March 2011. Changes to the revised regime include
The appointment of a Case Decision Group (CDG)
The opportunity for parties to comment on a draft penalty statement prior to the final decision
More interactive dialogue with the parties via oral hearings and state of play meetings
Increased transparency through notices and administrative timetables published on the OFT’s website
Collective Decision-Making Model
Under the guidance, following the issuance of a Statement of Objections (SO), a three member CDG will be appointed for the purposes of taking a final decision on the merits of the case. In particular, the CDG is to determine whether and what type of a decision is to be issued (i.e., an infringement decision or a “no grounds for action” decision), what (if any) the appropriate amount of the penalty should be, or whether or not the case should be closed altogether.
The CDG will not consist of any officials who were involved in the issuing of the SO. Instead, the CDG will be appointed by, and operate under the authority of, the Policy Committee, which is constituted of members of senior staff: the Chief Executive, other executive members of the OFT Board, the Chief Economist, the General Counsel and the Senior Director of Policy. In effect, the decision-making powers are delegated to a Policy Committee that is accountable to the OFT Board, that in turn is accountable directly to Parliament. This structure is aimed at ensuring that there is a clear separation between the investigative and decision-making stages.
Increased Interaction With the Parties
The guidance also signals the OFT’s intention to offer more interactive hearings and greater opportunities for direct dialogue between the investigated parties and the decision-making officials. For instance, parties under investigation will now have the opportunity to meet with members of the case team before the OFT issues an SO. The purpose of this meeting is to allow the parties to obtain information relating to substance and timing of the investigation before the OFT takes the decision to issue an SO. In certain cases, the OFT may also conduct a meeting with the parties, and relevant third parties, to discuss differing views on the relevant market definition, or the interpretation of a key piece of evidence.
In addition, where the OFT is considering imposing a financial penalty on an investigated party, that party will have the opportunity to comment on a draft penalty statement before the OFT takes a final decision vis-à-vis penalties. The draft penalty statement will include details relevant to the calculation of the fine, such as the starting point percentage, turnover figures, duration of the infringement and any mitigating factors, as well as the CDG’s explanations. Recipients of a draft penalty statement will be able to provide written comments and to request and attend an oral hearing with the CDG, Chief Economist, General Counsel and members of the case team. Together with the recently revised guidance as to the appropriate amount of a penalty (see our 13 September 2012 OTS, “UK’s Top Antitrust Regulator Issues New Fines Guidance: Penalties to Better Reflect the Impact of Relevant Conduct”), this procedure is intended to provide increased procedural transparency and strengthen a party’s ability to exercise its rights of defence more effectively.
More generally, the guidance encourages addressees of an SO to request and attend oral hearings that are intended to provide parties with the opportunity to bring the CDG’s attention to issues of particular importance to the case.
In order to enhance the transparency of investigations, the guidance indicates that the OFT will publish online opening notices that detail the basic aspects of relevant cases. These notices will include information such as whether a given case relates to Chapter I and/or Chapter II prohibitions, and will include short summaries of the suspected infringements and the industry involved. Names of the investigated parties will normally not be disclosed before an SO is issued. Furthermore, the OFT will upload case-specific administrative timetables for the investigations, covering the stages up to the decision of whether or not to issue an SO and the timing of the steps that are to follow until the end of the investigation.
The guidance represents another significant step in the series of reforms that have taken place with respect to the OFT’s procedural rules. Through increased transparency, a greater role for parties subject to an antitrust investigation and the introduction of more checks and balances, it is hoped that the antirust enforcement system in the United Kingdom becomes more robust and effective. Furthermore, in the interests of legal certainty and business efficiency, it is hoped that the time to take decisions will become shorter.
Michal Kocon also contributed to this article.