This post was also written by Angela Gregson and Daniel Jepson.
The OFT’s stance
On 23 August the Office of Fair Trading (OFT) issued a non-binding short-form opinion on proposals by the National Farmers’ Union (NFU) and the Country Land and Business Association (CLA). The NFU and CLA propose to recommend to their rural members a ‘reference rate’ for the grant of access to their land for the purposes of laying and servicing broadband cables. The OFT has confirmed that in principle the recommendation of such a fixed reference rate would be anti-competitive. However, the OFT is of the opinion that the benefits to the provision of high speed broadband in rural areas outweigh the negative effects on competition of having a fixed reference rate. As such the proposal for a reference rate could meet the criteria for an exemption from the provisions of the UK Competition Act 1998.
There are a couple of interesting points to note about the opinion:
- that the OFT issued a short-form opinion at all – this is only the second since they were introduced in 2010; and
- the OFT has shown that when it is required to act quickly it has the capability to do so – the opinion was issued on 23 August, in the holiday period, only 34 days after the NFU and the CLA had formally requested it and almost a month before the deadline.
The OFT is, it seems, keen to demonstrate that it can deliver short-form opinions quickly and effectively and by doing so encourage businesses to use the useful tool of short-form opinions. The OFT has demonstrated that it can deliver the formal part of the process quickly and effectively, however, what the opinion does not tell us is how much informal discussion went on before the formal process began. To ensure that businesses are encouraged to use the process, the OFT will need to make sure that the whole process, not just the formal element, is quick and effective. Success in the use of short-form opinions will not come unless the OFT reassures businesses that it will not probe unduly deeply into their affairs to produce the opinion.