PN 65/02      10 October 2002

Companies House (CH) has not infringed the Competition Act, the OFT has concluded.

The OFT found no evidence to support allegations that CH was engaging in predatory pricing or anti-competitively squeezing margins.

CH has a statutory duty to maintain a register of company information and to make it available to the public. Copies of the documents registered at CH have traditionally been made available in microfiche and paper form. Since 1997, CH has developed commercial internet products (Companies House Direct and WebCHeck) allowing copies of registered documents to be provided electronically to its customers and enabling CH to develop more user friendly products such as a database of directors.

CH supplies its competitors with the basic company information which is then resold by those competitors, usually in an enhanced form including other company financial or credit reference data.

The complainant argued that CH failed to set prices for the competing side of its operations that fully reflected its costs, resulting in predatory pricing. It was also alleged that CH sold on basic company information to competitors at a price that squeezed the margins of its rivals anti-competitively.

After a thorough investigation of the facts, the OFT found no evidence that CH had:

• engaged in predatory pricing by setting prices for the competing commercial side of its operations that failed to recover its costs
• overcharged for basic information sold to competitors in order to subsidise the price of its competing commercial products, which would have anti-competitively squeezed the margin on the products of its competitors.

John Vickers, Director General of Fair Trading said:

'It is important that the disciplines of the market place, including competition law, should apply to a public body that competes with the private sector. However, a careful investigation of the facts has shown that Companies House has not breached competition law as alleged.'

NOTES

1. The complainant was a member of the Business Information Providers Association BIPA, formed in 1997 to promote the interests of providers of business information.

2. Powers under the Competition Act 1998
This Act gives the OFT powers to investigate suspected infringements of the Act's prohibitions and take action where it finds that infringements have taken place:

i) the Chapter I prohibition prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition within the UK (or any part of it) and which may affect trade within the UK (or any part of it)

ii) the Chapter II prohibition prohibits conduct by one or more undertakings which amounts to the abuse of a dominant position in a market in the UK (or any part of it) which may affect trade within the UK (or any part of it).

3. In this press release the functions of the Director General of Fair Trading (DGFT) under the Act are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.