Competition complaints reach record high in tough economic climate
“Struggling” businesses are increasingly blowing the whistle on competitors in a bid to shore up their own positions in a tough economic climate.
According to official figures, the number of competition complaints made to the Office of Fair Trading (OFT) has risen since the credit crunch began, and reached a record high of almost 2,000 in 2010. By contrast, only 975 complaints were made in 2006, before the economic crisis.
Stephen Smith, head of competition at Reynolds Porter Chamberlain (RPC), which obtained the figures, says: “Common complaints will include allegations of overcharging by suppliers or unfairly low prices charged by dominant competitors seeking to strangle new and innovative competition at birth.
“The number of complaints about breaches of competition rules has shot up since the credit crunch in a clear sign that the impact of anti-competitive behaviour is felt more sharply when the economy is underperforming. 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.
“If the UK does enter a double-dip recession, the OFT (or its proposed successor, the Competition and Markets Authority) could face an even bigger mountain of complaints to sift through next year, making clarity on how it prioritises its workload more important than ever.”
Smith says the OFT has limited resources and launched cases on only one per cent of complaints received last year.
