The Office of Fair Trading (OFT) has clarified the investigation criteria that it uses by publishing a framework with the principles it applies.   Commenting on the criteria, the OFT has said that it “will allow us to focus on high impact projects and to look more systematically at whole markets and issues. We aim to use all the tools available to us to improve markets where they are not operating effectively”.

It is thought that actions against vulnerable consumers or blatant infringements are now being particularly targeted through the new criteria, while infringements by new or small businesses or those carried out only for a short period of time would be less likely to be investigated.

Before applying the 6-step prioritisation track the OFT will determine whether they are best placed to tackle the problem, or if perhaps another regulator can tackle the issue more effectively.  If the OFT is best placed then the following factors (which are illustrative not exhaustive) are taken into consideration before investigating:

1. Estimate of direct consumer benefit that would arise from intervention

Potential consumer benefit as a result of intervention should be judged based on the data available.  If there is no information available the rules of thumb are:

  • Cartels: 10 per cent of parties' turnover in affected market/sector 
  • All other: 5 per cent of parties' turnover in affected market/sector

2. Deterrent effect

  • Are the parties likely to be party to other similar arrangements?
  • Does the issue being considered affect the whole sector or other sectors?

3. Aggravating/Mitigating Factors on the need to take action

Aggravating factors:

  • Action affects particularly vulnerable consumers. 
  • Blatancy or duration of the infringement.

Mitigating factors:

  • Conduct ceased (for reasons other than OFT investigation) or very short duration.
  • New entrant/SME.

4. Policy/Precedent/Profile

  • New or Priority sector
  • Need for policy clarity 
  • Novel infringement 
  • Criminal cartels
  • Raising awareness of the OFT 

5. OFT resources

What resources would be required to achieve desired outcome?

6. Likelihood of Success

Other things being equal, they will investigate where they have the best chance of success.

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