CAT 14
27 Apr 2011
Judgment following an appeal against a decision of the Office of Fair Trading (“OFT”) dated 21 September 2009 entitled “Bid rigging in the construction industry in England” (“the Decision”). In the Decision the OFT found that 103 undertakings had each committed between one and three infringements of the Chapter I prohibition contained in section 2 of the Competition Act 1998. The OFT imposed penalties totalling £129.2m, of which £1,543,813 was imposed on the Appellant for two alleged instances of cover pricing (referred to in the Decision as Infringements 46 and 190). The Appellant appealed the Decision both as to liability and penalty.
As regards Infringement 46 the Appellant submitted that the OFT had adduced insufficient evidence of the facts alleged by the OFT to satisfy the burden of proof. Having considered all the evidence, including evidence adduced by the Appellant, the Tribunal held that the OFT had not established on the balance of probabilities that the Appellant had committed the alleged infringement. Accordingly, the Tribunal allowed the appeal in respect of Infringement 46, and the finding of liability and penalty in respect of that infringement were set aside.
In a postscript to its conclusion in respect of Infringement 46, the Tribunal stated that it did not consider that material contained in transcripts of interview – even if reviewed and attested by the interviewee – was a satisfactory means of seeking to evidence alleged infringements by another company. Even if the OFT has not obtained witness statements in order to fortify its own decision-making process, once it becomes clear that there is a material dispute as to the facts on which its decision was based, the OFT should consider to what extent such witness statements are necessary or desirable in order to support those facts in an appeal, subject always to the provisions of rule 22 of the Competition Appeal Tribunal Rules 2003 (SI 2003 No. 1372).
As regards the remaining alleged instance of cover pricing, Infringement 190, the Appellant submitted that the OFT’s finding in relation to that infringement was vitiated for fundamental error of law and/or failure to demonstrate an appreciable effect on competition or trade within the United Kingdom. The Tribunal rejected that submission.
The Appellant challenged the penalty imposed on it on a number of grounds. The Tribunal rejected several of the arguments relied upon by the Appellant but was unanimously of the view that the penalty of more than £1.5 million imposed on the Appellant in respect of Infringement 190 was excessive and disproportionate having regard to the “twin objectives” of punishment and deterrence. Accordingly, the Tribunal allowed the appeal against the penalty imposed in respect of Infringement 190 to the extent that the penalty was varied to £300,000.
This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.