The European Antitrust Review 2014 Section 3: Country chapters

United Kingdom: Office of Fair Trading

Following four decades of protecting consumers and driving competition, 2013–2014 is the final year of the Office of Fair Trading (OFT). From April 2014 the new Competition and Markets Authority (CMA) will take on our competition and consumer protection roles, along with those of our partner, the Competition Commission.

Our three priorities for the year ahead are to maintain our delivery of high impact projects and cases, to pave the way for the new institutional arrangements that will enter into place, and to develop our staff and advance performance.

Our themes for this year do not differ substantially from last year, although we have an additional theme of working more closely with regulators. This is part of the preparation for the role the CMA will play in this area and is also a reflection of our desire to share expertise, resources and training with these bodies. We have also increased the focus on economic growth in this year’s plan. Competition drives growth by encouraging innovation, increasing business efficiency and giving empowered consumers a wider range of products and services to choose from. Our role is to seek out markets that are not working well and to tackle anti-competitive behaviour that stands in the way of growth.

The economic and fiscal backdrop will set the environment within which we operate. The economy will no doubt continue to affect the projects and cases we run. Fiscal constraints continue to press us to work ever more efficiently, achieving more with less.

It is impossible to forecast with complete accuracy our projects and cases during 2013–2014 but looking at our current case portfolio and the experience of the past year I would anticipate the following:

  • A continuing stream of high impact antitrust competition investigations. We currently have a rich portfolio of cases, including 16 civil competition investigations and a number of criminal cases. Our enforcement portfolio includes investigations spanning a range of sectors, and covers potential infringements of the laws prohibiting both anti-competitive agreements and abuses of a dominant position. We have a mix of cases in retail, online and upstream markets, including alleged ‘pay for delay’ in the pharmaceutical sector and concerning hotel online booking. We showed during 2013–2014 that we could run cases swiftly, as we did against Mercedes-Benz and five commercial vehicle dealers.
  • A steady rate of merger control cases, with the portfolio likely to be determined in part by economic and market developments. The past two years saw a marked increase over the previous period in the number of cases reviewed at phase 1 – including 104 in 2013–2014. Our rate of referral to phase 2 was at its highest rate for six years, running at about 14 per cent, partly reflecting the consolidation between close rivals in response to challenging economic circumstances. Our merger work is also likely to include further reviews of public hospitals, following the two cases taken during 2013–2014.
  • Continuing groundbreaking work through our market studies and other market reviews. During 2013–2014 this has included work on road fuels, payday lending and personalised pricing. We will continue to conduct a range of markets, likely to include public services and online markets.
  • More work with other regulators. This will include cooperation on cases and projects with the economic regulators (including the health regulator, Monitor) and with other regulators such as the new Financial Conduct Authority.

Looking ahead to the setting up of the CMA and helping it hit the ground running, our work will include the following:

  • Handing over a strong, balanced portfolio of cases, supported by effective processes and procedures. An important element of this is ensuring the handover of cases from the OFT to the CMA is smooth, minimising disruption for parties involved.
  • Motivating and supporting our people. Arguably the most important element of making sure that the OFT is in a strong state for the transition is continuing to appoint people to key roles. I have been delighted that over the past year we have seen internal candidates appointed, such as Sonya Branch as an executive director and board member and Chris Walters as chief economist. This is as well as recruiting experienced people to our senior leadership team, including Gaucho Rasmussen from the world of corporate in-house law. It is inevitable during a period of change that we will see more comings and goings. This presents opportunities for people inside and outside the OFT.
  • Working closely with others to make the transition effective. That means closer working with the Competition Commission including, for example, recent joint efforts to recruit future economists. It means sharing our knowledgeable staff with the Department for Business, Innovation and Skills.

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