OFT issues further draft guidelines
Clause 51 of the Bill gives the DGFT the power to propose procedural rules to carry into effect the new regime. Once approved by the Secretary of State (who may amend the rules) they will be embodied in secondary legislation. On 10 August 1998, the DGFT published draft rules and invited comments. Our detailed comments on the draft rules as submitted to the OFT are available on request (details below).
The key draft rules are as follows:
Notifications
Applicants for guidance or a decision are required to submit Form N (published in draft) to the DGFT. If the agreement/conduct is in a regulated sector, additional copies of the Form must be provided to the DGFT who will forward them to the relevant regulator. Form N is not dissimilar to the EC Form A/B. If Form A/B is also being completed, certain sections of form N need not be.
Public register of decisions
The DGFT will publish a summary of applications for a decision and an indication of the outcome of the application. The register will be on the Internet and in paper form at the OFT. Applicants are required by Form N to include a non-confidential summary of the agreement or conduct for this purpose.
Guidance and decisions
Guidance and decisions will be reasoned, although the OFT has stated that it expects most cases to be closed by comfort letter.
Consultation
Where the DGFT proposes taking certain actions, such as infringement decisions, cancelling exemptions, re-opening favourable guidance, etc. he must consult the affected person and give an opportunity for written representations. Oral hearings are only available for infringement cases, not for interim measures cases, differing from the position in EC law.
Access to file
Where the DGFT proposes to make an infringement decision, or to take an interim measure, he must allow the person committing the infringement to inspect the OFT's file, excluding confidential documents and OFT internal papers. No access to the file is permitted where the DGFT intends to withdraw immunity from financial penalties following a notification, unlike the position at EC level.
Third party appeals to DGFT
Appeals to the DGFT by third parties against decisions must be made within 1 month of the decision. In our view this is too short a period of time to prepare an objection to a decision, particularly for trade associations and companies with management outside the UK.
Investigations
On a "dawn raid" or announced investigation, OFT officers must if requested allow a reasonable time for the occupier's legal adviser to arrive before continuing the investigation. There is no guidance as to what a reasonable time will be, other than "such time as the officer considers reasonable in the circumstances". We hope that guidance will be given on this point.
Extension of transitional provision
If an application for extension of a transitional period is not opposed after 2 months from receipt of the application, there is an automatic extension of 6 months. If the extension is not to be granted, the DGFT must inform the applicant at least 1 month before the transitional period ends. This is also considered too short a period of time, especially where an application for exemption needs to be prepared.
For further information about the Competition Bill, please contact: Richard Taylor on 0171 367 2108 or Vicky Sandry on 0171 367 2056.
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