Margaret Bloom can talk the talk. Until you hear her speak, it is difficult to imagine that this tiny, bird-like woman is the scourge of cartelists. But when she holds forth on competition policy and business, she speaks with religious zeal.
Walking the walk, on the other hand, has not been quite so easy for Bloom. She has been at the Office of Fair Trading (OFT) as competition enforcement director for six years, but it wasn’t until last year that the regulator made real headway on Bloom’s specialist subject of cartels.
Only the OFT’s two most recent investigations have given it the headlines the Government craves. The toys and games inquiry yielded the OFT a £22.5m fine against Argos and Littlewoods, while the ongoing football shirts investigation is close to the hearts and wallets of many parents in the UK.
But now, just as the OFT has been given its adult teeth by the Enterprise Act, Bloom is set to bow out. She is a fearsome opponent, but deeply respected. Without exception, every lawyer interviewed for this piece said they will be sad to see her go when she leaves on 31 July.
Bloom parries questions about her retirement, saying: “I’m really pleased with what we’ve done in my time, but there’s a lot more to do.” When pressed, she concedes: “Yes, I would have been even more pleased to have been able to get out a number of cartel cases before I retired – they’ve taken longer than I would have wished.”
An economist by training, Bloom started life in industry, moving to Government when she saw a job advertised at the Science and Technology Secretariat, then part of the Department of Trade and Industry (DTI). Strictly speaking, she never left the DTI. “It’s like a library book,” she quips. “You’re on loan.”
The OFT has changed beyond recognition in the six years since the DTI loaned out the ‘Margaret Bloom guide to competition law’. It now has around 180 staff, well over half of whom have joined in the last three years, and it has handled two major changes to competition law policy, seeing in both the Competition Act and the Enterprise Act.
Bloom is pretty complimentary about how helpful lawyers have been in that transformation. She tells how they helped her get the staff she wanted. Previously you had to be a UK national to work at the OFT, but, she recalls, “one or two of the law firms said, ‘That can’t be right’, and I said, ‘Please challenge it then, because we’d like to get it changed’. We can now do the European Economic Area and the Commonwealth.” (By the way, she would also like a few Yanks around, so if there are any employment lawyers out there who could fix it for her, I suspect that she’d be extremely grateful.)
The regulator has had a rocky couple of years with its expert tribunal, the Competition Appeals Tribunal (CAT) which overruled the OFT in the BetterCare and Express Dairies investigations. In both of these cases, the OFT decided not to proceed with the investigations following a complaint, but the CAT subsequently decided that Bloom was wrong in the reasons she gave publicly for dropping the case. She has a lot of respect for the tribunal’s work and for its head Sir Christopher Bellamy, but is clearly irritated by these cases.
“I hope there won’t be too many of them, because it means we spend time on appeals where we think that was the end of the matter. Instead of then spending more time unearthing more cartels, progressing infringement, we inevitably have to – because of finite resources – divert them into those cases,” she says. “Hopefully in time people will think, ‘Well, there’s not much point pursuing them’.”
Unfortunately this probably will not be the case – at least one similar appeal is currently planned. However, the OFT did have some good news last week when the CAT upheld the regulator’s decision to fine Aberdeen Journals £1m for price-fixing.
Overall, though, Bloom does not think the OFT needs more resources. The OFT’s annual plan sets a target of 10 infringement decisions a year, which Bloom thinks is just credible with the regulator’s current manpower.
Bloom has some interesting views on cross-border cooperation following the criminalisation of cartel offences under the Enterprise Act. For directors who are investigated, there is the spectre that the US may get its hands on information extracted in a UK inquiry. The perception remains that even post-criminalisation, the OFT is pretty fluffy compared with the Department of Justice (DoJ), which will send hardmen in orange jumpsuits, carrying
machine guns, to pick up suspected cartelists who enter US airspace.
Bloom concedes that “every now and again” the US requests information, but adds: “I personally think there won’t be that many [requests], and I think it’s useful to do that. After all, cartelists haven’t got any restrictions – they cross borders.”
However, competition lawyers feel that the OFT’s policy on this one is not fully worked out. For instance, they say it is not clear what happens when people collaborate under the leniency regime but are also involved in a cartel in the US.
It is odd that transatlantic cooperation should be the issue on which Bloom is least convincing, because she seems very proud of her work on cross-border issues, and particularly of her relationship with the US. She points out that the UK’s leniency regime was modelled on that of the US, and explains that four DoJ officials flew over at their own expense and spent all day at the OFT.
Plus, on the walls of Bloom’s office is a plaque from the acting head of the DoJ, Hugh Pate, which thanks her for an “outstanding contribution” to antitrust.
The future relationship between the OFT and the Serious Fraud Office (SFO) seems better worked out. When asked for details of how the SFO and the OFT cooperate, Bloom quips “brilliantly”; on a practical note, they are drawing up a memorandum of understanding detailing exactly which Government de-partment will take which role.
“What I’d expect is that we’d work closely and discuss with them any case which is likely to end up as a criminal prosecution. We’ll be carrying out the raids and the case will be moving increasingly over to the SFO,” she says. “At the stage when they take it over as a criminal prosecution, there’ll be a case controller from the OFT.”
Crucially, although not all investigations under the Enterprise Act will be criminal, many inquiries will start that way. “Anyone we think we’re likely to want to take as a criminal prosecution, we’re going to start [that] using criminal powers, because it’s not totally impossible but it’s highly undesirable to start something under civil powers and then change,” explains Bloom.
This has major implications for the way in which law firms advise their clients: either collaboration with criminal lawyers will become the norm, or corporate lawyers need to start dusting off their Police and Criminal Evidence (PACE) guides.
The OFT should get all sorts of swanky new surveillance powers under the Regulation of Investigatory Powers (RIP) act. Instead of waiting for people to bring in recorded conversations between cartelists, Bloom hopes she will able to set up informants as “covert human intelligence sources”.
Instead of the shaky amateur video Bloom was once sent, this means the OFT should be able to get quality audio or video recordings of the exact evidence it needs. The regulator will also be able to check if managers are in the building before it carries out a dawn raid – this is expected to improve access to diaries and written records of meetings.
Bloom believes these powers, rather than additional resources, will boost the number of cases the OFT can nail down. At one conference where Sir Derek Morris spoke, Bloom looked on approvingly as he pointed out that in Roman Britain there were just two punishments for cartelists – death or banishment. This lady really means it.
The prospect of a really tough regulator must be terrifying for business; it is just a shame that Bloom herself will miss out on the opportunity to kick some corporate butt.
The OFT’s current inquiry into Nike’s and Umbro’s branded sportswear is every parent’s dream and would have suited Bloom down to the ground.