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OFT announces consultation on private actions in competition law

OFT announces consultation on private actions in competition law

OFFICE OF FAIR TRADING News Release (63/07) issued by The Government News Network on 18 April 2007

The OFT is today publishing a discussion paper and announcing informal consultation on facilitating private actions in order to optimise the effectiveness of competition law in the UK, and to make redress for consumers and business more accessible.

Strong competition regimes are essential for open, dynamic markets. They drive productivity and innovation and ensure the efficient allocation of resources, and are good for consumers and business. Infringements of competition law cause significant harm to both consumers and businesses. Recent experience shows that harm to consumers may run into tens of millions of pounds in any given case. However, up until now consumers have recovered virtually no compensation. Businesses also find it difficult to recover losses and to remedy the competitive disadvantage they may have suffered from infringements of competition law.

The discussion paper sets out a number of principles and proposals aimed at ensuring effective redress and greater compliance with competition law. These include the following:

* consumers and businesses suffering losses as a result of breaches of competition law should be able to recover compensation, both as claims for damages on a standalone basis as well as in follow-on actions brought after public enforcement. To this end, representative actions should be more broadly available, and

* processes and systems should be available to encourage effective ways of resolving private actions, and to encourage settlement of cases without going to court or trial wherever possible.

Subject to the outcome of the consultation, the OFT envisages making recommendations to the Government to improve the effectiveness of redress for those who have been harmed by breaches of competition law. The OFT will also respond to the European Commission's forthcoming White Paper on damages actions for breach of the EC anti-trust rules. Philip Collins, OFT Chairman, said:

'A more effective private actions system would promote a greater culture of compliance with competition law and ensure that public enforcement and private actions work together to the best effect for business and consumers.'

The consultation period will last for eight weeks and end on 13 June 2007. The discussion paper can be found at http://www.oft.gov.uk

NOTES

1. In December 2005, the European Commission published a Green Paper, Damages actions for breach of the EC antitrust rules and an accompanying Commission Staff Working Paper (the 'Green Paper'). The Government and the OFT both submitted responses to the consultation.

In HM Treasury's Pre-Budget Report, the Government signalled its intention to work with the competition authorities and the European Commission to identify and eliminate any barriers to redress for parties injured by anti-competitive behaviour. In the Budget itself, the Government indicated that the OFT intended to consult on this discussion paper and welcomed the progress that the OFT had made.

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