Media briefing: Office of Fair Trading Report on Effective Competition Compliance

This week the Office of Fair Trading ("OFT") is expected to publish its awaited report on the key drivers of competition law compliance and the essential elements of creating an effective compliance culture within a business. The report follows a review of competition law compliance best practices and consultation with business and practitioners which was launched by the OFT at the end of 2009. 

Following the collapse of the BA price fixing cartel case last week, the report is a timely opportunity to re-assert the importance of competition law compliance amongst the business community. The report is expected to include the OFT's views on how businesses can best achieve compliance. Recognising the practical challenges of implementing effective compliance programmes, businesses will be keen to hear from the regulator itself how it considers effective compliance can best be achieved. Of particular interest will be the OFT's views on whether, and to what extent, it plans to "reward" businesses that operate effective compliance cultures with lower fines, in the event that a rogue member of staff causes the company to infringe the competition law rules

What can we expect as an outcome from the OFT review?

The report is expected to set out the OFT's views on:

  • key drivers of competition law compliance;
  • key elements for an effective competition law compliance culture;
  • best practice in competition law compliance;
  • initiatives by the OFT to help foster competition law compliance.

Among the suggestions that the OFT received during the consultation on areas where it could help to foster compliance were the following:

  • offer discounts from financial penalties where the business has an effective compliance culture;
  • develop compliance training materials for business;
  • share best practices on competition law compliance to provide businesses with insights on activities that they could undertake;
  • updated guidance to address how businesses should carry out competition law risk assessments, how to mitigate competition law risks and how to develop an effective compliance programme;
  • develop online competition law compliance guides and training.

The report comes in the wake of a number of ongoing initiatives by the OFT to incentivise and promote competition law compliance including:

  • Short-form Opinion procedure.  On 27 April 2010 the OFT issued its first advice under a new procedure allowing it to give firms clarity on competition law issues. Under the Short-form Opinion procedure, the OFT provides guidance to businesses seeking clarity on how the law applies to proposed collaboration agreements between competitors which raise novel or unresolved competition issues.
  • Speech by OFT Chairman on the importance of competition law compliance: In March 2010 the OFT published a speech by OFT Chairman Philip Collins on the importance of competition compliance and, particularly, on the role of trade associations. 
  • OFT guidance on responsibilities of directors and disqualification in competition law cases expected in 2010. In August 2009 the OFT published proposed changes to its guidance on the circumstances in which it will apply for director disqualification orders in competition law cases. Updated guidance is expected later in 2010.

The OFT's findings and guidance on effective competition law compliance will be of interest to:

  • companies and their advisers seeking to manage competition law risk;
  • in-house advisers seeking to develop effective competition compliance programmes;
  • compliance officers seeking to integrate competition law compliance as part of a company's corporate risk management procedures.

Hogan Lovells’ Antitrust, Competition and Economic Regulation practice are available to provide legal background on the report and its consequences. Please contact:

Lesley Ainsworth
Partner in Hogan Lovells' Antitrust, Competition and Economic Regulation (London)
Tel: +44 207 296 2181

Susan Bright
Partner in Hogan Lovells' Antitrust, Competition and Economic Regulation (London)
Tel: +44 207 296 2263

John Pheasant
Partner in Hogan Lovells' Antitrust, Competition and Economic Regulation (London)
Tel: +44 207 296 2646

Suzanne Rab
Counsel in Hogan Lovells' Antitrust, Competition and Economic Regulation (London)
Tel: +44 207 296 2382

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