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, in the period 2000 to 2006, 103 undertakings had each committed between one and three infringements of the prohibition contained in section 2 of the 1998 Act, which applies to agreements or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom (“the Chapter I prohibition”). The OFT imposed penalties totalling £129.2m, of which nearly £1.8m was imposed on the Appellants for two alleged incidents of cover pricing in 2000 and 2005.
The Appellants appealed against the Decision both in respect of liability and penalty. The Appellants submitted that: (i) the OFT had not discharged the burden of proving that the Appellants had committed either of the alleged infringements; and (ii) the overall penalty had been calculated arbitrarily, and was excessive, disproportionate and unjust, and should be reduced.
Having considered all the evidence, including the evidence of witnesses called by the Appellants and cross-examined on behalf of the OFT, the Tribunal held that the OFT had not established on the balance of probabilities that the Appellants had committed either of the alleged infringements. The Tribunal therefore allowed the Appellants’ appeal against the OFT’s findings of liability. Those findings and the penalties imposed in respect of them were set aside.
In a postscript to the judgment, 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).
