Clause 179 - Cartel offence
Enterprise Bill
12:15 pm
Miss Melanie Johnson (Parliamentary Under-Secretary, Department of Trade and Industry; Welwyn Hatfield, Labour)
I assure my hon. Friend that I always give his remarks proper weight. I will reflect on his point but I do not want to be drawn into the discussion because it deals with a specific case.
On the reaction of the European Commission, Mario Monti said in September:
''Cartels are cancers on the open market economy''
and that they
''undermine the competitiveness of the industry involved, because they eliminate the press from competition to innovate and achieve cost efficiencies.''
The Commission has said about our legislation that
''The European commission is aware of the UK debate on the proposed changes to its competition law. UK national law is of course a matter for the UK, but the Commission also knows that part of the debate is on the interaction with Community law.
It is very important that the interface between Community and national law is carefully worked out. We are pleased that the UK has been working closely with the Commission to ensure that this is the case.''
The Commission therefore has no concerns on that front.
On the interplay with the regimes of other member states, the criminal offence applies to cartels that are implemented or intend to be implemented in the UK and therefore there is no conflict with civil proceedings in other member states. If more member states introduce or make use of criminal penalties, we will need to work with them on an appropriate allocation mechanism for assigning cases, but that is merely to implement the routine methods of working together that exist in parallel situations.
On the interplay of leniency with the EC regime, the OFT can grant leniency for the UK jurisdiction. Where the cartel activity affects interstate trade, the OFT already advises potential whistleblowers to approach overseas competition authorities, including the EC authorities in parallel, and will continue to do so. The OFT will continue to work closely with colleagues in DG COMP to ensure effectiveness of the competition regimes including leniency programmes at national and EU level.
On the relationship of the modernisation of the EC regime with the primacy of EC law and the implementation by member states, the proposals are not finalised, but as they proceed, we shall focus on avoiding any possible conflict with the new offence. The Commission has said that modernisation does not preclude criminalisation, so we have no reason to await the outcome of the modernisation process, which would only delay us from putting our own house in order in the UK.
As to the interplay of civil and criminal proceedings, the OFT's role in civil proceedings is in the investigation of a criminal offence designed to ensure a streamlined approach. That makes good sense. The OFT will, of course, need to collect evidence to different standards according to whether it is dealing with a criminal or civil case.
In criminal cases, the OFT will need to follow procedures in the Police and Criminal Evidence Act 1984, caution suspects before taking statements and so forth. Obviously, it will be different under the civil regime. The Serious Fraud Office will undertake prosecution of criminal cases.