This week we’re all talking about…the OFT

Competition regulator the Office of Fair Trading (OFT) has been on fire these last few months and the question thats on everyone’s lips is why all of a sudden?

A record number of investigations has been launched in the last six months by the OFT from the price-fixing of dairy, soft drinks and tobacco to the construction industry rigging its bid offers.

In the last week alone the competition watchdog won its right to challenge the fairness of banks charging customers as much as 39 for overdrawing.

Yesterday (30 April) it was handed a crucial ruling over where new supermarkets can be built. The decision to give the OFT this power came after the Competition Commissions two-year inquiry in the UK groceries sector.

Then at the start of this week the regulator launched a probe into 11 retailers over the price-fixing of tobacco.

Thats all in one week. The OFT, however, had been on probe frenzy long before this. It had named 112 companies in the construction industry for rigging bids, lambasted airport services BAA for its monopoly of UK airports and hit out at airlines, including BA and Virgin, over a fuel surcharges cartel.

If thats not enough investigations to be getting on with, the OFT is also looking to start more probes including whether theres a supermarket cartel into loo roll.

Its this extreme aggressiveness, which is likely to have overstretched the watchdogs staff, that has led to the OFT making at least one faux pas.

In the midst of launching half a dozen inquiries, last Wednesday the regulator had to make a 100,000 apology to supermarket chain Morrisons for claiming it had been involved in the dairy cartel, which saw consumers out of pocket by 270m.

But why after years of the occasional investigation here and there has the OFT gone into a frenzy?

The watchdog has been granted new criminal powers through the Consumer Protection from Unfair Trading Regulations, which came into force last month (April). The changes allow the regulator to dole out sanctions, including a direction to imprison defendants.

So now might be a good time to qualify as a competition lawyer.