Conclusions and recommendations
1. The OFT has been too reliant on complaints
as a source for its competition enforcement work. The
OFT should start a greater proportion of investigations on its
own initiative, rather than waiting for a relevant complaint.
It should also be ready to stop cases if they are not strong enough
to continue.
2. The OFT has no database of intelligence
to support its investigations. The OFT
needs to supplement information from competition complaints with
data from other sources such as the new Consumer Direct helpline
and the work of Trading Standards officers across the UK. A database
would help it to do so efficiently.
3. The OFT suffers from high staff turnover,
and many employees do not have sufficient experience to deal with
complicated cases. The OFT should focus
on supporting staff better, with broader training including project
management and investigation skills, and a complete, up-to-date
guidance manual.
4. Small case teams are a cause of the OFT's
long timescales on cases. The OFT should
employ larger teams on its investigations. In small teams, the
loss of important members of staff endangers the investigation's
progress. Larger teams will reduce this risk and bring a broader
range of skills and experience to the investigation.
5. At present, the OFT does not work to any
deadlines. The target timescales on its
website are completely unrealistic and are never met. The OFT
should have amended these deadlines as soon as it realised they
were not achievable. It should now set clear and realistic timetables
for each case.
6. The OFT does not publish information about
performance against timescales. This lack
of transparency limits effective scrutiny, making it difficult
for Parliament to assess the OFT's operation against expectations.
The OFT should publish its performance against its timescales.
7. The OFT's investigations create uncertainty
for the companies involved. There is scope
for different interpretations of competition law, and companies
face uncertainty over how the OFT will analyse a market. The OFT
should reduce this uncertainty by sharing its analysis with companies
earlier in an investigation.
8. The OFT does not use its powers to compel
companies to provide information. The
OFT can impose criminal penalties if companies do not provide
information. It has not used the penalties as it considers them
heavy-handed. It should use them where companies wilfully obstruct
an investigation and should explore with the DTI whether it can
raise civil penalties against companies in less serious circumstances.
9. The OFT can make an important contribution
to increasing productivity and deterring anti-competitive behaviour.
Its preliminary estimate of consumer benefit from investigations
(£110 million over five years) does not include wider economic
effects. The OFT should consider further research to gain a clearer
understanding of these broader deterrent and productivity effects
and how they might be enhanced.
10. The OFT is an organisation in transition,
which has yet to demonstrate that it can make effective use of
the substantial extra resources it has been given.
The Committee will wish to return to these issues in due course
to see what progress has been made and how well the OFT has implemented
the Committee's recommendations.
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