“1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those 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. 2. Any agreements or decisions prohibited pursuant to this article shall be automatically void. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of: any agreement or category of agreements between undertakings, any concerted practice or category of concerted practices which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.” any agreement or category of agreements between undertakings, any concerted practice or category of concerted practices which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.”
“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….” (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. (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….”
“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.”
“Gentlemen, This may be my last opportunity to inform you of a potentially damaging situation arising in our industry due to the possibility of Level 3 soon signing a non-disclosure agreement. The Duchy of Cornwall have informed the companies planning to land at Widemouth Bay that in future we must negotiate and allow technical solutions to be provided by a company called Cityhook. This is a very dangerous situation as it will result in our industry being controlled and dictated to by a third party from outside the industry and may result in forced technical solutions that do not address our needs. This company has managed to make a deal with the Duchy involving the laying of a large pipe perhaps with an off-shore platform, and we are expected to lease space in this pipe. Obviously there are great technical concerns and concerns regarding the likely cost and timescale of this. The Duchy has behaved in a completely disreputable manner and similarly Cityhook have been underhand in the way that they have operated and tried to force our hand at a very late state in the projects concern. All companies are resisting this and are actively seeking government support. The real danger is that our industry must plot its own destiny and once we have accepted a covert proposal of this sought on Duchy beaches then it may quickly spread to other beach landings. Therefore I would make the following strong recommendations to members: 1. They actively avoid planning a cable to land at a Duchy beach for the foreseeable future. 2. If approached by Cityhook, please resist any attempts to be persuaded by them until such time as we can discuss at a UKCPC meeting. On no account should any deal be struck and non-disclosure agreements should be avoided. Failure to comply could have dire consequences on our industry. Please also alert any installation people in your relative companies of this danger.”
“The purpose of this submission was for the case team to outline the case, the key arguments and the issues as identified by the case team at that stage in the life of the investigation. In addition the skeleton would generally recommend the way forward for the case. Following approval from the Branch Director, input from the then Legal Division and colleagues in the then Policy Branch would be sought. Thereafter the skeleton would be sent to the Director of CE Division for approval. Subsequently, the skeleton would be forwarded to the then Chairman of the OFT, Sir John Vickers, for his view.”
“In broad terms, prior to commencement of the CRM, the case team’s suggested way forward was for an SO to be issued, characterising the infringements as object and effect in connection with both the Collective Boycott and the Collective Setting Cases. In contrast, the CRP proposed that further work should be done so as to allow a non-infringement decision to be adopted in relation to both the Collective Boycott and the Collective Setting Cases.”
“The cartel has deprived consumers of the benefit of price reduction through the deployment of new technology. To suggest otherwise would be manifestly in error.”
“In our view the foregoing passage does not explain why there is no reference to the object-based infringement in the final case closure letter.”
“In the system as established by the Act it seems to us in general that there are probably three stages. At the first stage the OFT is investigating. Then it moves to a second stage at which it has to decide whether it is to issue a [rule 4] notice. At that point, in our view, its mode is primarily a prosecutorial mode; in other words, the OFT has primarily its prosecutorial hat on. It seems to us that the question the OFT must ask itself is the question similar to that which a prosecutor would ask in other contexts, "Am I satisfied that this evidence, if uncontested, would be sufficient to establish a Chapter I infringement?" The OFT, if it can answer that question in the affirmative, will then proceed to issue a [rule 4] notice. Then comes the third stage. The OFT, as decision-maker, will hear arguments and will have to weigh up the evidence. The question for the OFT then at the end of that proceeding is still the question whether it is satisfied that the infringement is sufficiently proved, giving due weight to the presumption of innocence and any reasonable doubt there may be.”
“It is plain that, where the enforcement body’s resources are limited, it is entitled to prioritise cases as long as: (i) there is no policy not to take action in relation to any particular class of case; and (ii) the policy is effective in that, for example, the cases selected for action will warn off or deter others.”
“30 It is common ground in these proceedings that the Director is a public official appointed by the Crown but independent of it. He is entrusted by Parliament with discretionary powers to investigate suspected offences which reasonably appear to him to involve serious or complex fraud and to prosecute in such cases. These are powers given to him by Parliament as head of an independent, professional service who is subject only to the superintendence of the Attorney General. There is an obvious analogy with the position of the Director of Public Prosecutions. It is accepted that the decisions of the Director are not immune from review by the courts, but authority makes plain that only in highly exceptional cases will the court disturb the decisions of an independent prosecutor and investigator: R v Director of Public Prosecutions, Ex p C[1995] 1 Cr App R 136 , 141; R v Director of Public Prosecutions, Ex p Manning[2001] QB 330 , para 23; R (Bermingham) v Director of the Serious Fraud Office[2007] QB 727 , paras 63–64; Mohit v Director of Public Prosecutions of Mauritius[2006] 1 WLR 3343 , paras 17 and 21 citing and endorsing a passage in the judgment of the Supreme Court of Fiji in Matalulu v Director of Public Prosecutions[2003] 4 LRC 712 , 735–736; Sharma v Brown-Antoine[2007] 1 WLR 780 , para 14(1)–(6). The House was not referred to any case in which a challenge had been made to a decision not to prosecute or investigate on public interest grounds. 31 The reasons why the courts are very slow to interfere are well understood. They are, first, that the powers in question are entrusted to the officers identified, and to no one else. No other authority may exercise these powers or make the judgments on which such exercise must depend. Secondly, the courts have recognised (as it was described in the cited passage from Matalulu v Director of Public Prosecutions ) “the polycentric character of official decision-making in such matters including policy and public interest considerations which are not susceptible of judicial review because it is within neither the constitutional function nor the practical competence of the courts to assess their merits.”
“76 As the Commission is under no obligation to rule on the existence or otherwise of an infringement it cannot be compelled to carry out an investigation, because such investigation could have no purpose other than to seek evidence of the existence or otherwise of an infringement, which it is not required to establish. In that regard, it should be noted that, unlike the provision contained in the second sentence of Article 89(1) in relation to applications by Member States, Regulations Nos 17 and 99/63 do not expressly oblige the Commission to investigate complaints submitted to it. 77 In that connection, it should be observed that, in the case of an authority entrusted with a public service task, the power to take all the organizational measures necessary for the performance of that task, including setting priorities within the limits prescribed by the law where those priorities have not been determined by the legislature is an inherent feature of administrative activity. This must be the case in particular where an authority has been entrusted with a supervisory and regulatory task as extensive and general as that which has been assigned to the Commission in the field of competition. Consequently, the fact that the Commission applies different degrees of priority to the cases submitted to it in the field of competition is compatible with the obligations imposed on it by Community law.”
“The objective of Article 81 is to protect competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources. Competition and market integration serve these ends since the creation and preservation of an open single market promotes an efficient allocation of resources throughout the Community for the benefit of consumers.”
“285. On the basis of the material before us, in respect of the alleged object-based” infringement, the position appears to us to be that the OFT decided not to: (a) determine whether it could establish to the legal standard that the object of the Collective Boycott Case or the Collective Setting Case was to prevent, restrict or distort competition, (b) investigate such counter arguments as might be advanced by the parties to justify their conduct or negate the evidence of potential infringement, (c) produce a sufficiently robust Statement of Objections and (d) adopt, in due course, a final decision. The OFT’s decision to close the investigations in relation to the alleged object-based infringement took into account a combination of substantive and administrative priority considerations which cannot be reviewed separately. 286. Having carefully reviewed both the evidence before us and the parties’ submissions, the Tribunal has concluded that a non-infringement decision is not the necessary implication of the OFT’s decision to close the investigations in relation to the alleged object-based infringement in the Collective Boycott Case and the Collective Setting Case. 287. The Tribunal would be very concerned if the OFT, as the main competition authority responsible for enforcing the 1998 Act, sat on the fence and refrained from taking final decisions due to a disagreement amongst the personnel of the OFT on a point of law. If, for example, the legal characterisation of an object-based infringement were to be the only point left to be resolved by the OFT, then, depending on the circumstances, the necessary implication of any decision to close the file might well be that the OFT decided, on the balance of probabilities, that it was unable to establish on its analysis of the law that the conduct at issue amounts to an infringement of the Chapter I prohibition. For the reasons set out above, this implication is not one that can be made having regard to all the evidence before us in the present case. 288. However the legal characterisation of an alleged object-based infringement may be relevant in the stayed judicial review proceedings before the Administrative Court; for example as to whether in the decision-making process there may have been an error of law or account may have been taken of irrelevant legal considerations.”
“19. In the application of the analytical framework set out in the previous paragraph it must be taken into account that Article 81(1) distinguishes between those agreements that have a restriction of competition as their object and those agreements that have a restriction of competition as their effect. An agreement or contractual restraint is only prohibited by Article 81(1) if its object or effect is to restrict inter-brand competition and/or intra-brand competition. 20. The distinction between restrictions by object and restrictions by effect is important. Once it has been established that an agreement has as its object the restriction of competition, there is no need to take account of its concrete effects. In other words, for the purpose of applying Article 81(1) no actual anti-competitive effects need to be demonstrated where the agreement has a restriction of competition as its object. Article 81(3), on the other hand, does not distinguish between agreements that restrict competition by object and agreements that restrict competition by effect. Article 81(3) applies to all agreements that fulfil the four conditions contained therein. 21. Restrictions of competition by object are those that by their very nature have the potential of restricting competition. These are restrictions which in light of the objectives pursued by the Community competition rules have such a high potential of negative effects on competition that it is unnecessary for the purposes of applying Article 81(1) to demonstrate any actual effects on the market. This presumption is based on the serious nature of the restriction and on experience showing that restrictions of competition by object are likely to produce negative effects on the market and to jeopardise the objectives pursued by the Community competition rules. Restrictions by object such as price fixing and market sharing reduce output and raise prices, leading to a misallocation of resources, because goods and services demanded by customers are not produced. They also lead to a reduction in consumer welfare, because consumers have to pay higher prices for the goods and services in question.”
“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. 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.”
“ … I can confirm that in making the decision to close the Collective Boycott and Collective Setting Cases, I did not consider whether either or both cases should have been transferred to OFCOM under paragraph 3.17 of the OFT’s guidance on concurrency.”
"... it is the policy of the OFT and the Regulators that, once it has been decided which United Kingdom authority should deal with a case, only that authority will handle the investigation, decision-making and enforcement for that case, unless the case is subsequently transferred from that authority to another."
“Consequently, telecoms is not a priority area for the OFT, particularly given the existence of OFCOM’s concurrent powers in this area.”
“…a competent person who has exercised any Part 1 functions in relation to a case ("the transferor") may agree with another competent person who has concurrent jurisdiction to exercise Part 1 functions in relation to that case ("the transferee") to transfer the case to the transferee.”