On 14 September 2017 Ofcom, the UK communications industry regulator, adopted new statutory guidelines (Penalty Guidelines) on how it would assess and determine the penalties (fines) payable by regulated communications companies who breach their obligations under the Communications Act 2003 (Act). The revised guidelines follow Ofcom’s June 2017 adoption of new guidelines for enforcement in regulatory investigations (Enforcement Guidelines) and procedures for investigating breaches of competition related conditions in Broadcasting Act licences (Broadcasting Investigation Procedures).
Although on their face the changes to the guidelines seem relatively minor, when considered against the background of (i) Ofcom’s increasingly pro-active enforcement policy; and (ii) the increased difficulty of challenging Ofcom’s decisions, following the 20 July 2017 change in the standard of review of decisions on appeal from an ‘on the merits‘ review to ‘judicial review principles‘, we expect the changes to make it easier for Ofcom to take action against regulated communications companies and more difficult for those companies to defend and appeal Ofcom’s decisions. As a net result, regulated communications companies need to take Ofcom enforcement action more seriously. Those companies are now financially incentivised to engage early with Ofcom and consider early settlement to secure a settlement discount, especially as they will find it more difficult to challenge Ofcom’s decisions on appeal.