U.K. Competition Watchdog Probes About 1% of Business Complaints

Britain’s antitrust watchdog received a record number of corporate complaints last year alleging anti- competitive behavior by suppliers and rivals as companies seek to improve their position during the economic downturn.

The U.K. Office of Fair Trading received 1,993 complaints last year -- a 14 percent increase over 2009 and more than double the 2006 figure, according to OFT data reviewed by the London-based law firm Reynolds Porter Chamberlain LLP. The watchdog is probing about a dozen of them.

“There is usually a lot of competition for the OFT’s attention, and when businesses are under pressure they will look to every avenue they can for an advantage over their competitors,” Stephen Smith, who heads the law firm’s competition practice, said in the statement.

Businesses and lawyers have complained about the OFT’s failure to open a sufficient number of cases -- one of many criticisms made as the U.K. government prepares to merge the watchdog with another regulator, the Competition Commission. Last year the OFT started 11 cases under Britain’s 1998 competition law, less than 1 percent of the number of complaints received from businesses seeking to break into markets with large, established players, the law firm said.

“The OFT simply doesn’t have the resources to follow up on every complaint,” Smith said. “That means that sometimes even really strong cases won’t be investigated.”

The regulator has said it’s committed to opening more cases. It currently has 15 open probes, five of which were started this year, OFT spokesman Frank Shepherd said.

‘Prioritization Principals’

“We have to take decisions based on our prioritization principals and focus our efforts and resources on deterring and influencing behavior that poses the greatest threat to consumer welfare,” Shepherd said in a phone interview.

About a decade ago, the OFT opened nearly double the number of current cases in a bid to set precedents early, according to figures provided by the regulator. It has since lowered the number to focus on higher-impact cases, while simultaneously increasing the amount of penalties imposed on violators, according to the data.

The OFT’s current cases include hotel online bookings, advertising on bus stops and benches and electronic books, among others.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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