Categories:Corporate

Competition and Markets Authority names former Slaughters partner as general counsel

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  • The starting point for understanding this story is surely the background to the creation of the CMA in the first place. The BIS study of how the competition regime was working found - to the surprise of no one in the competition law world - that the OFT is a failing organisation. It is incredibly bureaucratic and slow, sinking under multiple layers of internal committees and reporting systems characterised by 'group think' and 'diffusing responsibility and blame'. It was difficult to find out which particular individual was responsible for a decision and no one (especially not any of the senior bods) would take personal responsibility for getting it wrong.

    The poor quality of the OFT's enforcement activities has been the biggest area of concern, as illustrated by the following catastrophic failures (combined with the absence of any real successes in recent years): the collapse of the BA price fixing prosecution because of failures in evidence gathering and disclosure; the use of a ludicrous new fining methodology to set huge fines in the construction and recruitment agencies cover pricing cases; and, worst of all, the collapse of the tobacco cartel cases. The legal costs of these cases effectively bankrupted the OFT, which had to go cap in hand to the Treasury for emergency hand-outs.

    As for consumer law, only the lamest of efforts were made to enforce it (consumer law was dismissed internally at the higher echelons of the OFT as the 'poor relation' of competition law and starved of resources). And the OFT showed no appetite at all for taking on Article 102 abuse of dominance cases against big companies, despite such cases having much greater potential to improve competition in the UK economy than chasing after instances of unwise information sharing by tiny companies with modest combined market shares. Essentially the OFT was choosing to take the lazy option of relying on the existence of its leniency scheme to bring in relatively easy cartel cases, with evidence served up to them on a plate. A classic case of going for the low hanging fruit, and losing sight of the mission to improve competition for the benefit of consumers.

    Against that background, it is quite extraordinary that the CMA have decided to appoint effectively the OFT incumbent (Sonya Branch) to head up the CMA's enforcement section. I don't want to make any criticisms of her personally, but she has been a very senior person responsible for enforcement in an organisation that performed its enforcement functions very poorly indeed. Surely surely surely this is one case where a public sector organisation desperately needed fresh leadership and fresh start.

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