“…I would draw your attention to the letter dated24 January 2006 sent to Cityhook Limited by Chris Mayock which sets out the OFT’s provisional reasoning as to why both the collective boycott of Cityhook and the collective setting of wayleave fees cases are no longer administrative priorities for the OFT, notwithstanding the fact that, in each case, the OFT believed the parties had a case to answer. … Inherent in these provisional decisions [to close the OFT’s investigations] is the view that these higher priority cases were much more deserving of the resources tied up on the [collective boycott] case and/or the collective setting of wayleave fees case despite the merits of these two cases.”
“ Collective Boycott of Cityhook Limited (Cityhook) and the Collective Setting of Wayleave Fees 1. The Office of Fair Trading (OFT) has now decided to close its investigation into a potential collective boycott of Cityhook by the United Kingdom Cable Protection Committee (UKCPC) and 32 certain of its members (the Collective Boycott Case). This is on the basis that the Collective Boycott Case no longer constitutes an administrative priority for the OFT. 2. In addition, the OFT has now also decided to close its investigation into the potential collective setting of wayleave fees by the UKCPC and certain of its members (the Collective Setting Case). This is on the basis that the Collective Setting Case no longer constitutes an administrative priority for the OFT. 3. On24 January 2006 , the OFT wrote to the UKCPC, its members and certain interested third parties. That letter stated that the OFT had provisionally decided to close both the Collective Boycott Case and the Collective Setting case and gave the recipients an opportunity to comment on these provisional decisions before 5 pm on17 February 2006 (the Provisional Closure Letter). The OFT has received various diverse responses to the Provisional Closure Letter (the Responses). The OFT has carefully considered the Responses before taking the administrative decisions to close the Collective Boycott Case and the Collective Setting Case and has taken them into account where the OFT has considered it appropriate and proportionate to do so. 4. The purpose of this letter is to set out the reasons for these administrative decisions following consideration of the Responses. Accordingly, the history of the Collective Boycott Case and the Collective Setting Case is set out below. The OFT then explains the reasons for its administrative decisions. A summary of the germane points raised in the Responses and the OFT’s view on those points are set out in the Annex to this letter. By way of notice of these administrative decisions, copies of this letter have been sent to the UKCPC, its members and certain interested third parties. … The OFT’s Administrative Decision 21. The OFT has decided that although there is evidence of potential infringement in connection with both cases, the Collective Boycott Case and the Collective Setting Case would both need to be developed considerably before a sufficiently robust Statement of Objections could be issued. This would have to include, in particular in both cases, a more thorough analysis of the effect of the parties’ behaviour on competition. For the reasons set out further below, the OFT has decided not to carry out this work on the basis that neither case continues to constitute an administrative priority for the OFT. 22. Consequently, the OFT has decided not to proceed to issuing a Statement of Objections in accordance with rule 4 of theCompetition Act 1998 (Office of Fair Trading’s Rules) Order 2004 (OFT’s Rules). As a result, the parties have not had the 33 opportunity to exercise the rights afforded to them, most notably under rule 5 of the OFT’s Rules (notices, access to file and representations). The OFT’s view that there is evidence of a potential infringement, must therefore be regarded as preliminary and provisional. 23. The OFT receives in the region of 1200 or so competition complaints per year and only has the resources to commence some 25- 40 cases per year. Therefore the OFT has to make difficult choices as to which cases it allocates its limited resources. In this case, the OFT has decided that the allocation of further resources would not be appropriate. 24. This administrative decision has been taken to close the Collective Boycott Case and the Collective Setting Case for a number of reasons. The starting point for this analysis is the six prioritisation criteria adopted by CE Division. In respect of those criteria, in the OFT's view the balance of considerations falls as follows: a) consumer benefit from taking the case forward : there is little, if any, evidence of consumer detriment. For the Collective Boycott Case there is no evidence of Cityhook's technology lowering costs for telecommunications companies which could then be passed on to consumers in the form of lower call charges. With regard to the Collective Setting Case, the amount spent in respect of wayleave fees when compared to the entire installation of networks is insignificant and therefore it is unlikely that there has been significant consumer benefit or detriment; b) the strength of the evidence that there has been an infringement : although there is evidence of potential infringement, as noted above the Statement of Objections would need to be developed considerably before it was issued in relation to the Collective Boycott Case and/or the Collective Setting Case. This would include first gathering and analysing additional evidence as to effects. Second, it would include an investigation of plausible counter-arguments (whether in fact or law) that the parties could possibly put forward in their defence to justify their conduct or, indeed, to negate the evidence of a potential infringement. These are both material pieces of work impacting directly on the strength of the evidence to-date; c) the type of case : there is nothing specific about the Collective Boycott Case or the Collective Setting Case-neither is clearly a hard-core infringement, nor do either of them fall within one of the OFT’s priority areas: there is a question as to whether the role of the Crown Estate in the Collective Setting Case brings the OFT within the “Government and markets” priority framework, but in the 34 OFT's view the Crown Estate in this case is in a different position from cases in which Government is itself said to be responsible for the distortion of competition: here it is in part the victim of the alleged anti-competitive conduct; d) aggravating or mitigating factors on the facts of the case : there appear to be no particular aggravating or mitigating features on the facts of the Collective Boycott Case or the Collective Setting Case; e) any relevant policy consideration : there is a range of relevant policy considerations to which the OFT needs to have regard in respect of both the Collective Boycott Case and the Collective Setting Case, including the fact that the case team and the parties have dedicated very significant effort to the investigation and development of the case. This is a long-running investigation to which the OFT and the parties have so far dedicated substantial resources -while the point the OFT has reached in the case must clearly play a role in thinking about administrative priority, that alone should not deter the OFT from closing the case, if it believes that its resources are better used elsewhere in the future; and f) are we “best placed” to deal with the issue ?: if the matters need to be pursued, then competition enforcement action appears best able to deal with it. 25. Taking the above factors in the round, the OFT does not believe there to be a compelling case for allocating further OFT resource to either the Collective Boycott Case or- the Collective Setting Case. In general terms, the OFT would today allocate a low priority to both the Collective Boycott Case and the Collective Setting Case given, in particular, the absence of identifiable consumer detriment in both cases. 26. In this context, the OFT has weighed-up the potential benefits of pursuing the Collective Boycott Case and/or the Collective Setting Case against the potential benefits of diverting those resources to other major cases that CE Division currently has open. These alternative investigations include cases involving ‘hard-core’ cartel-type behaviour that cannot currently be progressed in a timely and effective manner due to CE Division's resource constraints. The OFT considers that the time and resources required to investigate and to bring the Collective Boycott Case and/or the Collective Setting Case to a conclusion would be better spent on these other investigations given their very serious nature. 27. It should also be noted that this process of prioritisation is ongoing and involves reviewing cases at key milestones during an investigation to ensure that pursuing a particular investigation continues to represent best use of the OFT’s resources. As 35 recognised above, CE Division is currently undergoing a substantial programme of change. Accordingly, at the present time, the OFT is placing significant emphasis on these prioritisation reviews as the new approach to focusing the competition enforcement work of the OFT is bedded in. Your sincerely Christopher Mayock Director Competition Enforcement 4”
“ANNEX The Collective Boycott Case 1. The majority of respondents welcomed the OFT's provisional administrative decision to close the Collective Boycott Case on the grounds that it no longer constituted an administrative priority for the OFT. Two respondents took the opposite view, with one respondent expressing its surprise at the provisional administrative decision given the amount of effort put into the case and the fact that there did appear to be a case to answer. A further respondent labelled the OFT's provisional administrative decision absurd. 2. One respondent commented that in being so categorical about its findings of breach of the Act and in describing in such detail each step of the inquiry, the OFT may unwittingly encourage third parties to mount a legal challenge to the OFT's administrative decision to close the file before the Competition Appeal Tribunal. This respondent stated that, at very minimum, there was a risk of unnecessarily generating document requests under theFreedom of Information Act 2000 and criticism of the OFT in the press. This party was also concerned that the conclusive tone of the drafting of the Provisional Closure Letter was likely to give third parties false hope such that they may commence futile legal proceedings against the UKCPC and some or all of its members. This would involve all parties in incurring further unnecessary legal fees. Other respondents suggested drafting changes to the OFT’s Provisional Closure Letter if it was going to form the basis of a letter notifying parties of the OFT’s final administrative decision. OFT’s Response 36 3. The OFT has spelt out its reasons in some detail for closing the Collective Boycott Case on the grounds of it no longer constituting an administrative priority in the attached letter. In the OFT’s view, this reasoning still stands despite the fact that it found that there was a potential infringement in connection with both the Collective Boycott Case and the Collective Setting Case. Inherent in that reasoning is the fact that the OFT believes that it has other ongoing cases which are much more deserving of the resources tied up in the Collective Boycott Case. 4. With regard to encouraging appeals before the Competition Appeal Tribunal, encouraging document requests under theFreedom of Information Act 2000 and attracting press criticism because of the level of detail in the Provisional Closure Letter, the OFT believes, the interests of transparency, that it is necessary and proportionate for it to explain the detailed context of its administrative decision. This is particularly so, given the duration of the pertinent investigation. 5. With regard to the point about the conclusive tone of the Provisional Closure Letter encouraging legal proceedings against the UKCPC and some or all of its members, the OFT considers that it has not and cannot have made a decision within the terms ofsection 46 of the Act thatsection 2 of the Act has been infringed. This is especially so, given the additional work identified as needed before a Statement of Objections was issued. As such, the evidential burden on a party instituting legal proceedings has not altered from what it was prior to the OFT's investigation. Consequently, it will still be the decision of any potential applicant to weigh up the chances of pursuing successful legal proceedings (with or without legal advice) given the evidence available regardless of the tone adopted by the OFT. In addition, as recognised in paragraph 21 of the attached letter, the Collective Boycott Case and the Collective Setting Case would both need to be developed considerably before a sufficiently robust Statement of Objections could be issued. This would include first gathering and analysing additional evidence as to effects. Second, it would include an investigation of plausible counter-arguments (whether in fact or law) that the parties could possibly put forward in their defence to justify their conduct or, indeed, to negate the evidence of a potential infringement. These are both material pieces of work impacting directly on the strength of the evidence to date. 6. Insofar as respondents suggested specific drafting changes to the Provisional Closure Letter, the OFT has considered these and has decided not to incorporate them generally as they do not express the view of the OFT or help to relay that view to the addressees of this letter. However, having reviewed the Provisional Closure Letter, the OFT acknowledges that the original drafting of the letter may have given an unduly categorical impression of the OFT’s assessment of the issue of breach in light of the internal 37 view that further work, including on the effects issues, would be required before a Statement of Objections was issued. Therefore, changes have been made to the attached letter to reflect more closely the OFT’s assessment of the issue of breach. Administrative Priorities 7. Several respondents welcomed the assessment of this case in the context of the six prioritisation criteria used to analyse whether a case constitutes an administrative priority for the OFT. In particular, some of these respondents emphasised that the lack of apparent consumer detriment was a reason for this case not being a priority for the OFT. 8. However, one respondent was highly critical of the OFT`s approach as described below. Consumer benefit from taking the case forward … OFT Response 13. The OFT understands the theory of the argument presented by the respondent. However, the OFT has not seen concrete evidence from third parties of the impact that Cityhook would have had on the speed to market for submarine cables generally and, in particular the OFT has seen no objective evidence from third parties as to how it would facilitate speed to market for new entrants. In addition, on the facts at the time of the alleged infringement, it was far from clear that the adoption of Cityhook technology would have increased the speed to market of services using the three trans-Atlantic cables actually in construction. 14. The OFT is not in a position, on the information available to it, to determine the impact that the use of Cityhook technology would have had on the route prices quoted by this respondent. In any event, the OFT considers that many factors other than the use of Cityhook technology could influence such prices. in this regard, Cityhook’s technology is concerned with landing submarine cables. Given that the cost of landing a submarine cable is minimal when compared to the overall cost of installing one, it would seem that factors impacting on the costs of other parts of the installation process (and not just the landing process) are more likely to impact on telecommunications costs to consumers. The strength of the evidence that there has been an infringement … OFT Response 38 17. The OFT’s view on the evidence (in connection with both the Collective Boycott Case and the Collective Setting Case), is that, although there is evidence of potential infringement, the Collective Boycott Case and the Collective Setting Case would both need to be developed considerably before a sufficiently robust Statement of Objections could be issued. This would include first gathering and analysing additional evidence as to effects. Second, it would include an investigation of plausible counter-arguments (whether in fact or law) that the parties could possibly put forward in their defence to justify their conduct or, indeed, to negate the evidence of a potential infringement. These are both material pieces of work impacting directly on the strength of the evidence to-date. The type of case … OFT’s Response 20. Based on the evidence seen by the OFT, the alleged collective boycott does not constitute a hard-core infringement of the Act. Presently, the OFT is investigating real hard-core cartel cases which cannot be progressed in a timely manner. These cases are of higher administrative priorities to the OFT than the Collective Boycott Case. 21. The OFT’s priorities are as set out in its draft annual plan which has recently been the subject of public consultation. The OFT’s current priority areas are consumer credit, healthcare, construction, mass-marketed scams and interaction between government and markets. These areas have been a priority to the OFT for over a year. Consequently, telecoms is not a priority area for the OFT, particularly given the existence of- OFCOM’s concurrent powers in this area. Notwithstanding the OFT’s current priority areas, the OFT still undertakes investigations in other sectors where it is evident that the case is a high priority for the OFT and remains so throughout the course of the investigation when compared at key milestones relative to other cases under investigation which have reached the same milestone. Details of the criteria used by the OFT to assess whether a particular investigation is a high priority case relative to other cases at the same milestone are set out in paragraphs 24(a)-(f) of the attached letter. 22. Consequently, the administrative decision to close the Collective Boycott Case is not a matter of the OFT changing its priorities retrospectively. It is rather a rational and proportionate assessment of the investigations it has underway against its priorities in order to determine the highest priority cases to which it should devote its limited resources. 39 23. The OFT questions this respondent’s calculation of the money spent in connection with the Collective Boycott Case. However, the OFT recognises that it and all the parties concerned have dedicated substantial resources to the investigation. The OFT contends that while the juncture reached in the investigation must clearly play a role in thinking about administrative priority, that alone should not deter the OFT from closing the case, if it believes that resources are better used elsewhere in the future. Aggravating or mitigating factors on the facts of the case … OFT’s response 28. The OFT receives in the region of 1200 or so competition complaints per year and only has the resources to commence some 25- 40 cases per year. Included within those complaints are many from both large and small businesses. Therefore the OFT has to make difficult choices as to which cases it allocates its limited resources. Resources are allocated to those cases which are perceived as being of the highest priority as assessed against the OFT’s prioritisation criteria detailed in paragraphs 24(a)-(f) of the attached letter. These prioritisation criteria do not discriminate between large or small enterprises as cases which are of a high priority to the OFT may involve both large and small enterprises. 29. Further, in assessing which cases are its highest priority, the OFT has to weigh in the balance the signal sent by closing the Collective Boycott Case when compared with the negative signal sent if the OFT had to close one of its more hard-core cartel investigations because it could not redirect resources from the Collective Boycott Case to progress it in a timely fashion. 30. With regard to the alleged exclusion of Cityhook, the OFT has decided that the case team had made out, prima facie, a case for the parties to answer in connection with the Collective Boycott Case. However, in the OFT's view this is not sufficient, of itself, to constitute an aggravating factor. 31. The OFT has not found any evidence of any party attempting to mislead Parliament. However, even if it had found such evidence, the OFT does not consider that, in the circumstances pertaining, this would be an aggravating factor that the OFT should take into account in balancing the relevant priority of a case. In this regard, the OFT notes that it is for Parliament to decide whether it has been misled. 32. Finally, the OFT considers that its view that there are no aggravating circumstances is a proportionate one given the evidence and responses to the consultation. 40 Any relevant policy consideration … OFT Response 37. The OFT has given the complainant and other interested parties the opportunity to comment on the OFT's provisional administrative decision. It would be inequitable not to let all interested parties have the same opportunity to comment on a provisional administrative decision which has a significant impact on their businesses. 38. By adopting this administrative decision, the OFT is not showing contempt for the UK or EC Parliament, it is merely exercising its discretion based on its administrative priorities. The OFT considers that it is acting in a proportionate manner in this regard. 39. The OFT's policy is to make markets work well for consumers. This has not changed since the change in the OFT's senior management. This administrative decision merely marks the OFT's wish to allocate resources away from the Collective Boycott Case to other cases which the OFT has concluded are presently of a higher priority to the OFT than the Collective Boycott Case. This conclusion was reached following an objective and proportionate assessment of the Collective Boycott Case and other cases at the same milestone against the OFT's prioritisation criteria as set out in paragraph 24(a)-(f) of the attached letter. 40. As previously stated, the OFT recognises that this is a long-running investigation to which the OFT dedicated substantial resources. For those reasons and in the interests of transparency, the OFT has explained its reasoning in some detail for closing the Collective Boycott Case on the grounds that it no longer constitutes an administrative priority for the OFT. However, while the juncture the OFT has reached in the case must clearly play a role in thinking about administrative priority, that alone should not deter the OFT from closing the case, if it believes that its resources are better used elsewhere in the future. Is CE Division "best placed" to deal with the issue? … OFT Response 42. As stated above, the OFT collected sufficient evidence for it to decide that there was evidence of a potential infringement in connection with both the Collective Boycott Case and the Collective Setting Case. The reasons for the administrative decision to close the Collective Boycott Case are set out in some detail the attached letter. 41 The Collective Setting Case 43. In general, the responses were favourable to the OFT's provisional administrative decision to close the Collective Setting Case. However, one respondent remarked on the impact that the closing of both the Collective Boycott Case and Collective Setting Case would have on Cityhook. OFT Response 44. As stated previously, the OFT receives in the region of 1200 or so competition complaints per year and only has the resources to commence some 25-40 cases per year. Therefore, the OFT has to make difficult choices as to which cases it allocates its limited resources. The OFT has carried an objective and proportionate assessment of both the Collective Boycott Case and Collective Setting Case against its prioritisation criteria (see paragraphs 24(a)-(f) in the attached letter) and found that neither of them continues to be a priority relative to other higher priority cases, measured at the same milestone. As a consequence, the OFT needs to allocate the resources previously allocated to the Collective Boycott Case and the Collective Setting Case to other higher priority cases currently under investigation within the OFT.”
“Sale price fixing, output restrictions, bid-rigging and market sharing”
“on the consumer benefit point, we have not seen evidence from third parties of the impact that Cityhook would have had on the ‘speed to market’ for submarine cables generally and in particular no evidence from third parties as to how it would facilitate entry to 48 the market for new entrants …”
“2 Agreements etc preventing, restricting or distorting competition (1) Subject to section 3, agreements between undertakings, decisions by associations of undertakings or concerted practices which– (a) may affect trade within the United Kingdom, and (b) have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom, are prohibited unless they are exempt in accordance with the provisions of this Part. (2) Subsection (1) applies, in particular, to agreements, decisions or practices which – (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. …”
“46 Appealable decisions (1) Any party to an agreement in respect of which the OFT has made a decision may appeal to the Tribunal against, or with respect to, the decision. … (3) In this section “decision” means a decision of the OFT— (a) as to whether the Chapter I prohibition has been infringed, …”
“47 Third party appeals (1) A person who does not fall within section 46 (1) or (2) may appeal to the Tribunal with respect to— (a) a decision falling within paragraphs (a) to (f) of section 46(3); … (2) A person may make an appeal under subsection (1) only if the Tribunal considers he has a sufficient interest in the decision with 62 respect to which the appeal is made, or that he represents persons who have such an interest. …”
“(1) If as a result of an investigation the OFT proposes to make a decision, the OFT must - (a) give written notice to the person (or persons) likely to be affected by the proposed decision; and (b) give that person (or those persons) an opportunity to make representations. (2) For the purposes of this section … “decision” means a decision of the OFT - (a) that the Chapter I prohibition has been infringed; …”
“Statement of objections 4. – (1) If the OFT proposes to make an infringement decision - (a) the OFT shall give notice of this stating which one or more of the Chapter I prohibition, the Chapter II prohibition, the prohibition in Article 81(1) and the prohibition in Article 82 the OFT considers has been infringed; and (b) the provisions of rule 5 shall apply. (2) Subject to rules 17 and 18, the notice referred to in paragraph (1)(a) must be given to each person who the OFT considers is a party to the agreement, or is engaged in conduct, which the OFT considers infringes one or more of the prohibitions mentioned in paragraph (1)(a). Notices, access to file and representations 5. - (1) In this rule - (a) “notice” means a notice that the OFT is required to give under rule 4, 12(3) or 13(1); and 64 (b) “relevant person” means a person to whom notice is required to be given under the rules mentioned in sub-paragraph (a). (2) A notice shall state: (a) the facts on which the OFT relies, the objections raised by the OFT, the action the OFT proposes and its reasons for the proposed action; (b) the period within which a relevant person may make written representations to the OFT identifying the information contained in the notice which that relevant person considers the OFT should treat as confidential information and explaining why he considers the OFT should treat such information as confidential information; and (c) the period within which a relevant person may make written representations to the OFT on the matters referred to in the notice. …”
“90. As to the various arguments concerning the availability of judicial review to Bettercare in the circumstances of this case, it seems to us, respectfully, that the position is relatively straightforward. If there is a relevant decision for the purposes of section 47(1), then a disappointed complainant has an appeal to this tribunal. If, on a true analysis, there is no relevant decision, but only an exercise of discretion not involving a decision whether the Chapter I or II prohibition has been infringed, then a disappointed complainant may have a remedy, if at all, by way of judicial review at common law. Which route applies depends solely on whether there is a “relevant decision” or not. 91. As we see it, possible complications arise only if too narrow a view is taken of what constitutes a “relevant decision” for the purposes of section 47(1). On the Director’s approach, so it seems to us, quite a lot of substantive issues under the Act could arise in judicial review proceedings. In the present case, it is true, the issue is limited to whether North & West is an undertaking, albeit that that question is not a particularly straightforward matter in a competition law context. In other cases, however, the issue could be whether there was a dominant position, or an abuse, or, in respect to the Chapter I prohibition, whether there was an agreement, or a restriction or distortion of competition. Those are legal and/or economic issues, or questions of 70 mixed law or fact, which this Tribunal is supposed to be equipped to deal with, notably by virtue of the requirements governing the appointment of chairmen (Schedule 7, paragraphs 4(3) and 26(2)), the process of appointment of appeal panel members, and the training of appeal panel members (Schedule 7, paragraph 24). The Tribunal is also a single tribunal for the United Kingdom. 92. In those circumstances, we are not ourselves convinced that acts of the Director which go beyond the mere exercise of a discretion, and constitute a decision on the substance, were intended by Parliament to be susceptible to judicial review in whichever of the three domestic jurisdictions is appropriate, rather than “funnelled”, as it were, through the Tribunal. 93. There will, no doubt, be borderline cases where it is debatable whether the Director has “taken a decision that there is no infringement” or merely “exercised a discretion not to proceed”
“On the ordinary meaning of words, to take a decision in a legal context means simply to decide or determine a question or issue. Whether such a decision has been taken for the purposes of the Act is, in our view, a question of substance, not form, to be determined objectively. If there is, in substance, a decision, it is immaterial whether it is formally entitled a decision: otherwise the decision-maker could avoid his act being characterised as a decision simply by failing to affix the appropriate label.”
“In our view the main principles to be derived from Bettercare and Freeserve are: (i) The question whether the Director has “made a decision as to whether the Chapter II prohibition is infringed” is primarily a question of fact to be decided in accordance with the particular circumstances of each case (Bettercare, [24]). (ii) Whether such a decision has been taken is a question of substance, not form, to be determined objectively, taking into account all the circumstances (Bettercare, [62], [84] to [87], and [93]). The issue is: has the Director made a decision as to whether the Chapter II prohibition has been infringed, either expressly or by necessary implication, on the material before him? (Freeserve, [96]). (iii) There is a distinction between a situation where the Director has merely exercised an administrative discretion 73 without proceeding to a decision on the question of infringement (for example, where the Director decides not to investigate a complaint pending the conclusion of a parallel investigation by the European Commission), and a situation where the Director has, in fact, reached a decision on the question of infringement ( Bettercare , [80], [87], [88], [93]; Freeserve , [101] to [105]). The test, as formulated by the Tribunal in Freeserve , is whether the Director has genuinely abstained from expressing a view, one way or the other, even by implication, on the question whether there has been an infringement of the Chapter II prohibition ( Freeserve , [101] and [102]).”
“…the words “as to whether” in section 46(3)(b) refer both to a decision that the Chapter II prohibition has been infringed, and to a decision that the Chapter II prohibition has not been infringed. It is equally common ground that there may be a decision that the Chapter II prohibition “has not been infringed” if the decision in question finds that at least one of the necessary elements comprising the Chapter II prohibition is lacking. Thus, even if the decision is limited to deciding that the body in question is not an “undertaking” (as in Bettercare ), that by necessary implication is a decision that the Chapter II prohibition has not been infringed, because an element essential to establishing the infringement is not present. The same applies, in the Tribunal’s opinion, if the decision in question is to the effect that there is no dominant position, or no abuse, or no effect on trade in the United Kingdom. In each case it follows, necessarily, that there is no infringement of the Chapter II prohibition.”
“… there are subtle “grades” of decision in which some decisions on the substance are insufficiently “final” or “definitive” to constitute “appealable” decisions. In our view, there is either a decision on the substance or there is not. It may be that some non-infringement decisions are more fully reasoned than the present decision, particularly where there is a non-infringement decision at the end of the second, rather than the first, stage of investigation. But in our view the matter cannot depend on how thorough the Director’s investigation has been up to that point, how the Director describes the document, or how far he chooses to go into detail: any such approach would effectively give the Director himself the right to decide whether his decision was to be appealable.”
“In addressing this central issue, it is not in our view helpful to use the concept of a “decision to reject a complaint” because such a term is ambiguous. The Director may decide to “reject a complaint” for many reasons. For example, he may have other cases that he wishes to pursue in priority (compare Case T-24 and 28/90 Automec v Commission[1992] ECR II-2223 ); he may have insufficient information to decide whether there is an infringement or not; he may suspect that there may be an infringement, but the case does not appear sufficiently promising, or the economic activity concerned sufficiently important, to warrant the commitment of further resources. None of these cases necessarily give rise to a decision by the Director as to whether a relevant prohibition is infringed.”
“On that approach, the Director’s decision in this case is to be contrasted with other kinds of decisions to close the file, such as where the Director, without going into the merits, decides not to open an investigation because he has other cases to pursue in priority (the situation dealt with by the Court of First Instance in Automec , cited above); because he has decided to make a market investigation reference to the Competition Commission under theEnterprise Act 2002 ; because another competition authority is investigating the matter; because of the possible effect on criminal proceedings undersection 188 of the Enterprise Act 2002 ; or for some other reason which does not involve him taking a considered position on the merits of the case.”
“ … deal with anti-competitive behaviour using the Competition Act and/or Articles 81 and 82 of the EC Treaty, prioritising action against price fixing and abuse of market dominance intended to remove rivals (the ‘ hard-core ’ behaviours)” (HC 461, p. 9).”
“… the nature of the alleged infringement – in particular, is it a hardcore case? …”
“Annex 20. Based on the evidence seen by the OFT, the alleged collective boycott case does not constitute a hard-core infringement of the Act. Presently, the OFT is investigating real hard-core cartel cases which cannot be progressed in a timely manner. These cases are of higher administrative priorities to the OFT than the Collective Boycott Case. … 29. Further, in assessing which cases are its highest priority, the OFT has to weigh in the balance the signal sent by closing the Collective Boycott Case when compared with the negative signal sent if the OFT had to close one of its more hard-core cartel investigations because it could not redirect resources from the Collective Boycott Case to progress it in a timely fashion.”
“It is self-evident that a decision giving reasons should clearly and accurately convey the real reasons for a decision, preferably in plain language. The role of the draftsman or adviser is to assist the decision-maker to convey with clarity what his reasons in fact are, and to resist the temptation to introduce a formula, or “gloss”, intended to reduce the risk of legal challenge. Otherwise, the parties may not receive the 85 reasons with the clarity to which they are entitled, and difficulties could arise in establishing what the reasons in fact were …”
“The OFT decided that the case team had made out, prima facie, a case for the parties to answer in connection with both the [Collective Boycott] Case and the Collective Setting Case. Nevertheless, additional work to further improve the draft Statement of Objections would need to be undertaken prior to it being issued. On that basis, were the OFT to issue a Statement of Objections, then both the [Collective Boycott] Case and the Collective Setting Case would be run as object and effect infringements of the Act .”
“…I took the view that the reference to a possible ‘object’ infringement in the provisional case closure letter should be omitted from the final case closure letter for a number of reasons as follows (and bearing in mind the views expressed to me by a senior legal adviser concerning the relevance of the Competition Appeal Tribunal’s case law in this area). First, as I have already explained there was a strong difference in views within the OFT as to whether the alleged infringements could properly be characterised as being by ‘object’. This point was also raised in a response to a provisional case closure letter. Consequently, at paragraph 5 of the Annex to the final closure letter the OFT acknowledged, in response to third party comments, that the original (provisional) letter may have given an unduly categorical impression of the OFT’s assessment of the issue of breach and that changes had been made to the final closure letter to reflect the OFT’s assessment more closely. Second, looking at the cases in the round, the further resource requirements which led to the cases being closed on administrative priority grounds related primarily to demonstrating an effect on competition. However, the additional resource requirements would not have been limited to this exercise. For example, given the ongoing internal debate within the OFT as to whether the alleged infringements could properly be characterised as being by ‘object’ and the third party comment regarding the OFT’s assessment of breach, 89 further analysis and review of the case law would have been required before the OFT could take a position regarding an ‘object’ case. As noted at paragraph 70 [of Mr Smith’s witness statement] above, further drafting work, in relation to both object and effect, would also have been necessary.”