UK antitrust update: more cases, more criminal enforcement, more bugging
Since the introduction in the UK of 'modern day' competition rules under the Competition Act 1998, the enforcement strategy of the Office of Fair Trading (“OFT”) has been to focus resources on a limited number of high profile, high impact cases. Investigations into anti-competitive practices in connection with airline passenger fuel surcharges, sports goods retailing, tobacco retailing, dairy retailing and supermarket grocery retailing have all been taken forward on the basis that they meet the OFT enforcement priority of being high profile and, where unlawful behaviour is found and brought to an end, delivering direct benefits to consumers.
More cases, more criminal enforcement
The OFT has now indicated that its enforcement emphasis is changing: it will be seeking to increase deterrence by pursuing more cases, proceeding with investigations more quickly, covering more geographical areas of the UK and focusing particularly on those cases where it can take action against individual directors, through criminal prosecution or disqualification from acting as a director.
In addition, the OFT is investing heavily in intelligence gathering resources. Under the Regulation of Investigatory Powers Act 2000, the OFT is empowered to carry out intrusive surveillance and property interference for the purpose of investigating the criminal cartel offence. Intrusive surveillance means covert surveillance in relation to anything taking place in any residential accommodation (including hotel accommodation) or in any private vehicle and involves the presence of an individual on the premises or in a vehicle, or by means of surveillance devices, to hear or see what is happening in the premises or vehicle. Property interference allows for the covert installation of devices.
For all investigations (whether criminal or civil), the OFT is authorised to use directed covert surveillance (for example, watching a person’s office) and covert human intelligence sources (i.e. informants). It is also authorised to obtain access to communications data (for example, records of telephone numbers called).
Where previously, civil and criminal investigations were run separately within the OFT, they will now be run together by a single investigation team. The intention is that material secured pursuant to any investigation will, where appropriate, be used in connection with both civil and criminal proceedings.
What does this mean?
One of the key drivers for the proposed changes to UK competition law was Ministers’ concern that there were too few competition cases. This change of emphasis by the OFT signals the likelihood of a material increase in the number of investigations that will be initiated over the next year. Against this backdrop is the increased pressure faced by directors to take responsibility for, and monitor, competition law compliance within their companies. For directors and senior executives who are unsure about the potential risks they face, now is the time to undertake a risk audit.
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