What should Ofcom do when mobile network operators (“MNOs”) spot a loophole in the regulator’s price control mechanism and proceed to “game” the system over several years, increasing their revenues by many millions of pounds?
This unsuccessful appeal before the Competition Appeal Tribunal was brought by Telefonica, the only MNO that had failed to exploit the loophole, against Ofcom’s decision that, although it intended to amend the price control regime prospectively, it would not interfere with charges that had already been levied in accordance with the letter, if not the spirit, of the regime. The case raises an interesting point about the value to be placed on legal certainty by Ofcom. Continue reading
Competition lawyers may want to brush up on their criminal law. The Court of Appeal’s recent judgment in Interclass Holdings v OFT  EWCA Civ 1056 borrows criminal law principles to guide the calculation of penalties imposed.
The appeal was a further instalment in the litigation arising from the OFT’s largest ever investigation under the Competition Act 1998 concerning collusive tendering practices in the construction industry. A round of litigation before the Tribunal had resulted in substantial reductions in the fines imposed by the OFT on many of the appellant undertakings. This further appeal by Interclass concerned the application by the Tribunal of a 100 per cent uplift to the provisional fine payable by Interclass with the intention of adequately deterring both Interclass and other undertakings from committing infringements in the future.
The Court of Appeal accepted that the Tribunal had correctly followed a staged approach to the calculation of the penalty, beginning with starting figures based on the seriousness of the infringements and then proceeding to consider whether an uplift should be applied for deterrence.
However, the Court borrowed two important concepts from criminal law. Continue reading