Following a seven-year investigation, in 2010, the UK Office of Fair Trading (OFT) reached a decision that two tobacco manufacturers and ten retailers had entered into illegal vertical agreements whereby the retailers agreed to set their shelf prices for the two manufacturers’ corresponding brands at fixed relative prices. The OFT imposed total fines of £225m, the largest in any OFT case. Compass Lexecon expert Neil Dryden was retained by Asda Wal-Mart for its appeal to the Competition Appeal Tribunal (CAT). In a series of three expert reports, Dryden and his team set out evidence suggesting that Asda had not entered into such agreements, would not have had incentives to enter into such agreements, and that small changes in the nature of the agreements could led to very different results to those predicted by the OFT. At the CAT hearing, it became clear that the agreements had not in fact operated as alleged and the OFT sought to refine its theory of harm. However, citing evidence of the appellants that different types of agreement could have very different effects, the CAT ruled against the OFT. Assisting Neil Dryden were Erik Langer, Bertram Neurohr and Eduard Barniol Barcons of our London and Madrid offices, and Affiliate, Gerard Llobet, Associate Professor of Economics at CEMFI. We worked with Mark Jones and Peter Scott of Norton Rose, and James Flynn QC and Robert O’Donoghue of Brick Court Chambers.