The Office of Fair Trading (OFT) copped its share of flack last month – not least from frustrated competition lawyers.
The regulator came under fire for claims that a legal loophole is preventing it from forcing companies to hand over documents during investigations. OFT chief executive John Fingleton told MPs that there were problems with the 1998 Competition Act because, although the regulator required companies to provide information, it could only prosecute individuals for withholding documents or supplying false or misleading evidence. The regulator argued that it struggled to identify individuals as most information was provided by law firms. Competition lawyers have rejected the OFT’s claim, insisting that the regulator has ample powers to obtain company documents.
One also has to wonder how difficult it really is to find an individual responsible, or whether it is more a case of the OFT not wanting to pursue individuals. The fact that the regulator has not used the sanctions provided to take on an individual during the past five years might well be the answer to that question.
Meanwhile, the OFT has launched an investigation into banking services for small business, with Clifford Chance, Freshfields Bruckhaus Deringer and Simmons & Simmons battling it out to advise Barclays Bank. The heavyweight competition teams have been invited to pitch for the high-profile role after Barclays’ former competition adviser, ex-Simmons partner Peter Freeman, left to join the Competition Commission. The OFT review comes four years after the commission found that Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland (RBS) had all charged excessive prices to small businesses. RBS has instructed Linklaters instead of Freshfields, which advised the bank for the initial inquiry in 2002.
Norton Rose is advising HSBC and Herbert Smith is understood to be acting for Lloyds TSB.