No Duty Of Equal Treatment Or Fairness Owed To Those Under A Competition And Markets Authority ('CMA') Investigation

R (on the application of Gallaher Group Ltd and others) v The Competition and Markets Authority [2018] UKSC 25

On 16 May 2018 the Supreme Court ("SC") allowed an appeal by the Competition & Markets Authority ("CMA") against a Court of Appeal judgment that found that the Office of Fair Trading ("OFT", i.e. the predecessor to the CMA) had acted unlawfully by failing to repay Gallaher's and Somerfield's fines which were imposed as a result of the tobacco retail pricing decision (whereas the OFT had repaid the fines imposed on Martin McColl Retail Group Ltd and TM Retail Group, i.e. "TMR").

The SC determined that UK law does not recognise equal treatment as a distinct principle of administrative law. Whereas those subject to a CMA investigation had a legitimate expectation that they would be treated equally, the CMA did not owe them a duty of 'equal treatment' or 'fairness' when conducting early resolution settlement negotiations.

Even if the OFT had breached a legitimate expectation by failing to give the same assurances to Gallaher/Somerfield as it did to TMR, that did not provide a basis for reversal of the fines imposed. The distinction in treatment between TMR and Gallaher/Somerfield was objectively justified and was not irrational.

The SC also unanimously ruled that a mistake benefiting one party made during early resolution settlement negotiations should not be replicated so as to treat all parties fairly.


In April 2008, the OFT issued a statement of objections to a number of parties alleging infringements of competition law in relation to the fixing of retail prices for tobacco products. Gallaher and Somerfield (together the "Respondents") were two such parties placed under investigation.

In June 2008, six parties, including the Respondents, entered into Early Resolution Agreements ("ERA") with the OFT. These ERAs required an admission of the infringement and the provision of further cooperation with the OFT. In return the party under investigation would receive a reduction in any penalty imposed. Upon issuance of the final decision, a signatory to an ERA was still able to, if it wished, submit an appeal to the Competition Appeal Tribunal ("CAT").

At about the same time, TMR specifically asked for an assurance that it would receive the benefit of any successful appeal against the OFT's decision by another company. On the basis of an assurance given by one of the OFT's case officers, TMR agreed to enter into an ERA and not...

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