Investigations by the Office of Fair Trading are being hampered by a legal loophole preventing it from forcing companies to hand over documents.
The1998 Competitions Act allows the OFT to prosecute companies which fail to supply requested information during investigations, but the way the law is drafted could undermine this power. The legislation insists specific individuals are prosecuted, which the OFT says is difficult as the majority of information is supplied through law firms acting on companies’ behalves.
The legislation also grants companies being investigated a ‘reasonable excuse for delay’, but as the OFT has not used its prosecution powers in the last five years, the extent of this defence is untested.
This kind of non-compliance has contributed to the slow investigations the OFT has been criticised for, with procedures typically taking over three years.
In response, the watchdog says it is looking at how this procedure is evoked internationally and says it will not rule out trying to enforce this measure in the future.