OFT hampered by slow system

PETER RODGERS

Business Editor

The OFT's investigation into BSkyB's sports contracts comes under an old and cumbersome piece of legislation which the Government has promised to toughen.

The Department of Trade and Industry has indicated that it will give the OFT powers to prohibit restrictive practices as soon as they come to light and to levy fines immediately.

This would be part of a package of measures, including new powers for the OFT to seize documents and raid premises, which the Government announced that it favoured as long ago as 1993.

However, promised legislation to implement the powers has failed to materialise in successive Queen's Speeches. Ian Lang, the President of the Board of Trade, is to publish a new consultation document on the issue early next year and is studying whether to introduce some of the changes without full-scale legislation.

The promised prohibition approach to restrictive practices would short- circuit the present procedure, under which agreements between firms must be registered.

They are then sent to the Restrictive Practices Court to decide whether they should be banned.

This is time-consuming, and a company is only penalised if it subsequently ignores a ban decided upon by the court.

The prohibition system, which is used by the European Commission's competition authority, has the advantage of allowing immediate bans on undesirable practices. It is then up to the defendant to challenge the competition authority ruling in court.

The other investigation into BSkyB's position in the pay-TV market is under monopolies legislation, an area where the Government said in 1993 it does not intend to introduce a prohibition approach.

John Bridgeman, the director-general of Fair Trading, has also suggested to Mr Lang that the OFT should be given the power to make direct references of mergers to the Monopolies and Mergers Commission, a power Mr Bridgeman now has only for monopoly inquiries.