Through The Front Door: The Need To Manage Competition Investigations
November 18, 2014
By FTI Consulting
While at the International Bar Association conference in Tokyo recently I found myself, not for the first time, having to explain what it is I do for a living. When I was a competition lawyer it was easy: I advised on competition law. When I was at the Office of Fair Trading it was easy: I enforced competition policy. Now, I provide public affairs support in competition cases, which, while it may be more difficult to explain as it barely existed just ten years ago, is a business that has grown significantly over the last decade, with law firms and others moving into this space.
European competition investigations – mergers, antitrust, state aid and sector inquiries – can potentially touch any business, and the business impact that flows from an investigation can be dramatic: a blocked or recast merger; cartel fines of billions of euros; state aid granted or withheld; or eye-watering, headline-grabbing fines. And the media is always hard on the heels of the story, with potentially further adverse reputational consequences.
It is the combination of the technical and the political that makes competition investigations in the EU unique. While the investigation is an administrative process, formal decisions are the province of the full college of Commissioners. There is thankfully a certain amount of predictability (most mergers are cleared; most cartels are fined), but DG Competition, acting as it does largely on complaint or whistle-blowing, can be prone to a shift towards or against a particular sector.
Companies under investigation need to be tuned into the political priorities of DG Competition and the wider Commission, knowing when and where to speak to key stakeholders, and engaging officials in informal meetings without stepping on the toes of the legal team or interfering with the legal process. Taking the message beyond the confines of the case team can be an important way of raising the policy implications of the case. The trick is to track the combined noise that is being made around a case, both by politicians and the media, to position the company in the best possible light. It’s a delicate balancing act, but one which if successfully negotiated can deliver real benefits.
The new Competition Commissioner Vestager talked during her confirmation hearing of the need to take cases “through the front door,” meaning that the investigation process needs to be transparent. Businesses need to ensure they go through the front door fully prepared for what they may find on the other side, which they can only do by developing an integrated legal, economic, public affairs and communications strategy. Those that go in unprepared risk paying a heavy price, in terms of both costs and reputation.
The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting LLP, its management, its subsidiaries, its affiliates, or its other professionals, members or employees.
Claire Harris is a Senior Adviser in the Strategic Communications segment at FTI Consulting and is based in Brussels. She leads on the competition public affairs/communications side of high profile mergers, significant cartel cases, including settlements, antitrust and state aid investigations.