OFT looks to infrastructure for its next scalp

The OFT is investigating our utilities and transport. After its BA fiasco, the operators won't be worried...

Last Updated: 31 Aug 2010

The watchdog is launching a list of who owns and runs the businesses that control our strategic physical assets, identifying who's in charge of pumping out our electricity, gas and water, and who it is that's doing such a good job of making our buses and trains run on time.

The organisation has pointed out that ownership of infrastructure assets has changed a lot over the past 10 years. Time, it says, ‘to step back and look at how that has affected competition and consumers'. The list could spark OFT investigations into competition in such sectors in the autumn.

The OFT probably has a point: the average Megabus punter is likely to be clueless as to who it is that's pulling the strings behind the brand, and even more so as to who's in charge of the wet stuff that comes out of the taps. Most would be limited to taking a stab that these bosses are probably based overseas.

While unfair competition is an issue in every sector, it's never more important than when you're talking about the stuff that actually makes the country tick. But since we've been busily flogging off utilities and train companies to the highest bidder for a decade or more, the OFT could be said to be trying to shut the stable door when the horse has long bolted.

The OFT reckons the list will ‘improve public understanding of competition issues in UK infrastructure markets'. But it may have other intentions. This week its high-profile price-fixing case against four BA executives collapsed, wasting three years and a considerable amount of public money. After such an embarrassing failure, the watchdog may be hoping to improve public understanding of something more pressing: what it's actually there for.

Price-fixing has been illegal since 2003, with the OFT in charge of prosecuting cartels ever since. BA would have been its first scalp. But the case at Southwark Crown Court collapsed when the OFT received 70,000 new documents, including emails that suggested Virgin Atlantic were on about altering their fuel surcharge before they'd even met with BA, damaging its claims of collusion.  

After bouncing around shouting ‘put up your dukes!', the watchdog ended up scampering off with its tail between its legs. Now it's dusting itself down and looking for a new target. But with the BA result in mind perhaps, the group has been keen to point out that its latest venture is not expected to cost more than £100k.





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