{"id":75884,"date":"2016-11-09T10:30:15","date_gmt":"2016-11-09T10:30:15","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=1bafbec52fb3b4fc11979053e4f0d9ee"},"modified":"2016-11-09T10:30:15","modified_gmt":"2016-11-09T10:30:15","slug":"speech-michael-grenfell-on-the-cmas-progress-in-enforcing-competition-law","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=75884","title":{"rendered":"Speech: Michael Grenfell on the CMA\u2019s progress in enforcing competition law"},"content":{"rendered":"
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UK competition enforcement \u2013 progress and prospects<\/h2>\n

A year ago this week, when I was newly appointed in my job as the Competition and Markets Authority\u2019s (CMA<\/abbr>) Executive Director for Enforcement, I gave a talk at this conference on my vision and plans for enforcing competition law.<\/p>\n

I\u2019m very grateful to have been invited back. Or at least I was. When I got the invitation from the conference organisers, I flattered myself that the quality of my speech was such that you couldn\u2019t wait to have me back again. As it used to say on the billboards about a certain performer at our local circus when I was a child: \u2018Back by popular demand\u2019. And then the sobering truth dawned on me: last year, new to the job, I set out some of the CMA<\/abbr>\u2019s plans for improving the enforcement of competition law in this country. I now appreciate that you wanted to call me back to \u2018mark\u2019 my performance to date \u2013 how has the reality, one year on, lived up to the promises? A kind of large-scale annual appraisal.<\/p>\n

When you\u2019re new in a job, as I was last year, you have the luxury of setting out a vision with broad brush strokes. One year on, people expect a bit more nitty-gritty: some hard facts about what\u2019s actually been achieved. So I\u2019ll try to give you some nitty-gritty \u2013 without, I hope, losing sight of the broader vision, which is the purpose of our efforts at the CMA<\/abbr>.<\/p>\n

Objectives of CMA<\/abbr> enforcement policy<\/h3>\n

What I said a year ago, if I may summarise, is that the CMA<\/abbr>\u2019s enforcement work \u2013 using public money to take enforcement action against anti-competitive practices that harm consumers \u2013 has 2 main purposes. First, it puts an end to the specific wrongdoing. Second, it has a wider deterrent effect: sending a signal to other businesses that such anti-competitive practices will not be tolerated (and will give rise to sanctions and liabilities) so that those other businesses are encouraged and incentivised to be compliant with competition laws.<\/p>\n

I said that this is good for consumers, because competition generally exerts a downward pressure on price and an upward pressure on quality and innovation for consumers, and anti-competitive practices tend to weaken those pressures. But it is also important for the health of businesses \u2013 not just the businesses who are \u2018victims\u2019 of anti-competitive practices, whether as downstream customers or excluded competitors, but also because competitive pressures act as a spur to business efficiency. And that, in turn, is good for the performance of the wider economy.<\/p>\n

To underline the importance of this work in taking action against anti-competitive practices, last year I said something about the moral harm done by anti-competitive practices. I quoted Adam Smith\u2019s famous description of collusion between businesses as \u201ca conspiracy against the public\u201d. And I also quoted the much more recent \u2013 and very graphic \u2013 language used by David Lewis, the first head of the Competition Tribunal in post-apartheid South Africa, when referring to a cartel he had dealt with which had had the effect of raising the price of bread in South Africa, so putting bread at the dinner table beyond the reach of millions of poorer South Africans. He described the cartel participants as \u201cthieves at the dinner table\u201d.<\/p>\n

The title of my speech a year ago was \u2018tough but fair\u2019, and I saw \u2013 and see \u2013 this as a motto for what we at the CMA<\/abbr> are trying to achieve in competition enforcement. We need to be tough on anti-competitive practices, in the interests of consumers, business and the wider economy \u2013 for the reasons just discussed. And I also saw \u2013 and see \u2013 fairness in our case handling as crucial; not a consideration to be balanced against toughness, but part and parcel of an effective and tough enforcement regime. It is only if we are fair \u2013 if we are rigorous in assessing all the evidence and open to hearing all the arguments (including those that go against our initial impressions) \u2013 that we will achieve the right results, ie outcomes that clamp down on anti-competitive behaviour, but do not \u2018chill\u2019 legitimate business activity. And I think we owe a huge debt to my predecessors at the CMA<\/abbr>, and before that at the Office of Fair Trading (OFT<\/abbr>), for making great strides to improve the fairness and rigour of our processes: robust \u2018quality assurance\u2019 by way of internal checks and balances; the strengthening of the role of the Procedural Officer; and the new Case Decision Group system which ensures that the officials and the panel members who make the final decision on the case are a different set of people from those who undertook that investigation and drew up the allegations of infringement in the Statement of Objections. That way we hope to minimise the risks of \u2018confirmation bias\u2019. To a greater extent than many other competition authorities worldwide which apply similar laws, we have avoided the situation where (in the oft-quoted phrase) the same officials are \u2018investigator, prosecutor, judge and jury\u2019. And of course that\u2019s in addition to the parties\u2019 right to a \u2018full merits\u2019 appeal in the Competition Appeal Tribunal (CAT<\/abbr>), which many commentators regard as among the world\u2019s most stringent checks on a competition authority\u2019s decisions.<\/p>\n

The work done in the past few years by the OFT<\/abbr> and then the CMA<\/abbr> in strengthening fairness and rigour has been commendable. The improvement in our processes was already recognised by the judge in the galvanised steel tanks<\/a> criminal trial last year. We hope that it will also be recognised in appeals before the CAT<\/abbr> against some of our Competition Act decisions which we are facing, or are likely to face, in the coming months and years.<\/p>\n

But, as I said a year ago, the improvement in fairness and rigour needs to be matched by increases in the volume and the speed of our case work. To put it crudely, we need to do more cases, and more quickly:<\/p>\n