Online defamation threats investigation

Office of Fair Trading (OFT) closed consumer enforcement case.

• From: Competition and Markets Authority
• Published: 1 August 2012

• Case type: Consumer enforcement
• Case state: Closed
• Market sector: Distribution and service industries
• Outcome: Consumer enforcement - no formal action
• Opened: 1 October 2010
• Closed: 1 August 2012

Case reference: CRE-E/26352

Summary of work

1. The OFT has decided to close its investigation which considered whether a group of companies, and solicitors acting on their behalf, were using threats of defamation action to quell legitimate criticism online. The OFT had initiated the investigation in October 2010 following a referral from another regulator.
2. The investigation examined whether there had been an infringement of the consumer protection legislation enforced by the OFT under the Enterprise Act 2002 ('EA'). Under the EA, the OFT may apply to the court for an Enforcement Order against a person or company which has breached certain consumer protection legislation. Such an order would direct the person or company not to continue or repeat the conduct in question.
3. Following a thorough assessment of the evidence at its disposal, obtained using its formal powers under the EA and from other third party sources, such as information obtained from consumers and market reports, the OFT has decided that the investigation is no longer an administrative priority.
4. When determining whether to continue with an investigation, the OFT has regard to its published prioritisation principles. The OFT considered a range of factors including the likely impact of its work on consumers and the strategic significance of its work, balanced against the resources that an investigation might require and the risks involved. 
5. In the light of these prioritisation principles, the OFT considers that the resource implications of pursuing this particular investigation would exceed any direct impact of a potential finding of infringement by a court. This is because the group of companies under investigation have ceased trading and/or the individuals concerned are no longer engaged in the conduct in question and, on the basis of the evidence available, there appears to be little threat of reoccurrence in the near future. In addition, the OFT considers that pursuing this investigation would not be likely to further its strategic objectives compared with other work it might carry out.  In these circumstances, the OFT considers that seeking an Enforcement Order, which concerns a person's current and future conduct, would have a limited impact on consumer welfare.
6. There have been no court findings as to whether the group of companies and/or individuals concerned have infringed consumer protection law, and no such conclusion should be inferred from this closure decision. 
7. The OFT may reconsider its decision in the future if it receives further evidence of a suspected infringement, or its prioritisation assessment changes. 
8. No conclusions should be drawn from the present case as to the likelihood of the OFT prioritising other current or future cases.

Related documents

• Further details on the OFT views on defamation and consumer protection can be found in the OFT response to the Ministry of Justice's consultation on the draft defamation bill (June 2011). 

Published 1 August 2012