Supplementary memorandum submitted by
the Office of Fair Trading
Question 98 (Mr Richard Bacon): Age distribution
and years' qualification of OFT lawyers working in competition
enforcement
As of 31 December 2005, there were 65 legally
qualified staff working on competition enforcement issues. Of
these, 52 worked in our competition enforcement division and 13
in the legal division. Following a reorganisation at the end of
January 2006 all of these 65 staff now work in the competition
enforcement division and the information given here relates to
all of them.
Table 1 shows the age profile of the 65 staff—their
average age is 34.
TABLE 1: AGE DISTRIBUTION OF STAFF WITH LEGAL
QUALIFICATIONS:
|
|
|
|
Age |
|
|
|
Total |
|
20-24 |
25-29 |
30-34 |
35-39 |
40-44 |
45-50 |
50+ |
|
| Number |
0 |
9 |
31 |
18 |
5 |
1 |
1 |
65 |
To provide a comparison, table 3 showing the average age
for staff in the competition enforcement division who do "anti-trust"
work (OFT management objective 03) and their length of service.
The OFT's staff records concentrate on maintaining information
relevant to individual performance and current record; information
on staff careers before they joined the OFT is not readily available.
Attachment 1 also gives the length of service of OFT competition
enforcement staff by specialisation (lawyer, economist and "generalist"),
which will give an indication of post-qualification experience.
However, some specialist staff have had significant experience
outside the OFT.
Question 99 (Mr Richard Bacon): Average salary of staff
with a legal qualification.
The average basic salary (excluding bonuses) of these legally
qualified staff is £46,945, with a range from £27,951
to £90,073. By way of comparison, table 3 illustrates the
average pay by grade across all specialisations in the OFT's competition
enforcement division.
TABLE 3: AVERAGE PAY OF STAFF
|
Average Pay |
Number of Staff |
Grade |
Basic Pay
(excluding
bonuses) |
Cost
(including
pensions) |
In Grade |
With Legal
Qualification |
| Senior Civil Servant |
£75,074 |
£104,865 |
12 | 10 |
| Assistant Director/Principal Case Officer (G6/7) |
£51,259 |
£68,153 |
84 | 35 |
| Case Officer (HEO/SEO) |
£30,824 |
£39,425 |
54 | 18 |
| Support Staff |
£21,181 |
£26,923 |
22 | 2 |
Question 109 (Mr Richard Bacon): A summary of what made the cases investigated significant.
|
A short summary of the main points which prompted us to begin
our investigation in relation to each case looked at in Appendix
3 of the NAO Report is given below.
WEST MIDLANDS
ROOFING
This was a cartel investigation into collusion in tendering
bids for roofing contracts in the West Midlands area. Although
a relatively small geographic and product market, this case is
important as it focused on a key priority area for the Office
(construction) and involved allegations that the companies had
engaged in secret cartel agreements, which tend to be the most
damaging to the proper operation of the market. A number of the
victims of the practice were public bodies, mainly schools. It
was also felt that this case could be the "tip of the iceberg"
and lead to similar investigations in other geographic areas.
This has indeed turned out to be the case. The OFT also reserved
leniency applications in this case, which enable us to obtain
evidence without the need to use extensive compulsory investigation
powers. This was also a significant factor leading us to open
an investigation.
DU PONT
DE NEMOURS
The OFT received a complaint that a company dominant in supply
of photographic polymer film (it was in fact the only manufacturer
of this film in the world) was abusing its dominant position by
refusing to supply a competitor in a downstream market for the
production of holograms needed for, amongst other things, security
makings on credit cards using this film. This was a serious allegation
against what is described as a "super-dominant" undertaking
and the complainant provided a well argued complaint and initial
evidence which suggested there were reasonable grounds to suspect
an infringement. The case was also interesting from a policy perspective
as it involved the concept of "essential facilities",
which is still being developed at an EU level.
TM PROPERTY SERVICES
The OFT received a complaint that related dominant companies
were abusing their position by engaging in predatory pricing,
and raising wholesale prices to an unacceptable level. There were
a number of associated complaints which indicated that an investigation
under the Competition Act 1998 was warranted. The result of the
investigation was that neither company was found to hold a dominant
position in the market, so action could not be taken under the
Act. However, this did not address the competition concerns that
had been raised in relation to the property search market regarding
access concerns with some local authorities which indicate possible
problems in the way the market operates. As a result, the OFT
launched a market study into the use of public sector information
in a commercial context in December 2004.
REPLICA KIT
This is a significant market (about £250 million total
annual turnover) where allegations of price fixing at the retail
level have been made for a number of years. The complaint which
led to the investigation concerning allegations of price fixing
for a wide range of replica kits. The evidence which emerged as
the investigation proceeded confirmed that our decision should
primarily focus upon Manchester United and England strips, as
we had received sufficient evidence about these kits to warrant
the belief that a successful outcome could be achieved. This was
indeed the case.
HARWOOD CREMATORIUM
A funeral undertaker complained to the OFT that its local
crematorium was abusing its position of market dominance by refusing
access to its facilities in the Stevenage area. The case was initially
dismissed by the OFT on the grounds that the complaint do not
show evidence that Harwood Park was dominant in the relevant market.
Following further evidence from the complainant, the OFT subsequently
decided that there were reasonable grounds to suspect an infringement.
We took the case given its potential importance for competition
in local markets where an incumbent has some kind of "inbuilt"
competitive advantage. We were also concerned that, if proven,
the alleged abuse would affect a group of particularly disadvantaged
consumers—the recently bereaved.
TV EYE
This case was unusual as TV Eye asked to negotiate commitments
at an early stage in the investigation. Since the commitments
regime is new (having been introduced in June 2003 by the Enterprise
Act 2002), a number of procedural and substantive issues arose
during this process. Consequently, although the process of formalising
the commitments was extended, the level of resources we dedicated
to the case over time was relatively small. We have identified
the issues raised by this new process in this case and have taken
steps to address them.
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