UK: UK Issues Revised Investigation Procedures For Suspected Antitrust Violations

The UK Office of Fair Trading ("OFT") has published updated guidelines on its decisionmaking processes, in preparation for a wider reform of the UK competition law regime. The goals of the OFT's revised procedures are quicker and fairer decisions by the OFT in enforcing UK and EU antitrust rules, leading to more decisions being issued.

Main changes

These are the main changes announced in the revised "guide to the OFT's investigation procedures in competition cases":

  • The introduction of a three person "Case Decision Group"
  • More checks and balances to guarantee independent decisionmaking and due process
  • More transparency in penalty setting
  • More "interactive oral hearings" as well as additional "state of play" meetings
  • Publication of case-specific administrative timetables

These changes to OFT's processes and their implications are discussed below.

Case Decision Group

Where the OFT issues formal charges (so-called Statement of Objections or SO) against a company under investigation, an independent three-member Case Decision Group ("CDG") will be appointed to act as the decisionmaker, to decide whether the legal test for establishing an infringement has been met. The CDG will be responsible for taking decisions both on whether to issue an infringement decision (with or without directions) or a "no grounds for action"' decision; and the appropriate amount of any penalty.

The CDG's decisions must be formally adopted by the OFT's Policy Committee before they can be issued by the OFT. The introduction of a CDG is intended to foster better decisionmaking with the Policy Committee on antitrust violations and financial sanctions.

Checks and balances

The officials in charge of the investigative phase will not be members of the CDG. This is to ensure that the final decision in each case is taken by independent officials, who were not involved in the investigation of an alleged violation.

Penalty setting

In cases where the OFT believes there has been an infringement and a financial penalty will be imposed, the OFT will provide the parties under investigation with a draft penalty statement. The draft will set out the key aspects relevant to the calculation of the penalty, and the parties will be offered the opportunity to comment on the draft penalty statement in writing and to attend an oral hearing with the CDG. This will allow the parties to argue their case in favor of a penalty reduction before the OFT has made a final decision.

Oral hearing and "state of play' meetings

The OFT will provide more opportunities for hearings between the case team and the parties under investigation and more state of play meetings to provide the parties with an opportunity to understand the OFT's progress in an investigation and to clarify any outstanding issues. The state of play meetings ensure that the investigation remains transparent at all times. In particular, the OFT envisages state-of-play meetings at three points during the investigation:

  • Once a case has been formally opened, a meeting to cover the anticipated scope of the investigation, next steps, and the proposed timetable
  • Before the SO is issues, to update parties on the OFT's provisional thinking on the case, including the key potential competition concerns identified
  • After the SO is issues, a meeting to be attended by at least one CDG member, to inform the parties of the OFT's preliminary views on how the OFT intends to proceed with the case, in light of the written and oral representations it has received

The case team will remain the primary point of contact for the parties throughout the investigation and will relay information from the parties to the CDG as necessary. The parties or their representatives therefore cannot contact the CDG directly, other than at the state of play meeting after the SO and at the oral hearing on the issue of penalty.

Publication of case-specific administrative timetables

Once the OFT has opened a formal investigation and the parties have been informed, the OFT will publish on its website a notice that case has been opened, including the administrative timetable for the case. An administrative timetable will provide the parties with more certainty as to the duration of the investigation because, unlike merger reviews, there is no statutory timetable for antitrust proceedings. The case opening notice will also provide key contact details for the OFT case team and information about the sector being investigated. Save in exceptional circumstances, the OFT will not publish the names of the parties under investigation.

Implementation

The revised decisionmaking procedures come into immediate effect. They will apply retrospectively to investigations formally opened after 18 July 2012. The new procedures apply only to civil investigations against companies, not to criminal investigations against individuals.

Practical Impact

The changes outlined above reflect what the OFT says are lessons it has learned from past cases and bring the OFT's enforcement procedures more in line international best practices. The OFT believes these changes will enhance the robustness and efficiency of its antitrust enforcement action, result in better interaction with parties under investigation and improve the transparency of the OFT's work.

However, the changes fall short of introducing an institutional separation between investigation and decisionmaking. This could have practical implications on issues relative to burden of proof and due process. The CDG will be called upon to decide a case based only on the documents produced and collected during the investigation phase and put before it by the case team. The parties under investigation will not be permitted to engage in direct communications with the CDG, save on the issue of penalty. Written submissions to the case team on issues of liability therefore should be prepared mindful that they will be the parties' sole opportunity to influence the CDG's decisionmaking.

The revised version of "A guide to the OFT's investigation procedures in competition cases" can be found at http://www.oft.gov.uk/shared_oft/policy/OFT1263rev

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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