Competition and Markets Authority Investigations

If the Competitions and Markets Authority (CMA) have ‘reasonable grounds to suspect’ anti-competitive behaviour it will typically ‘open a case.’ This usually follows a period where it undertakes its own independent research and on occasion hold talks with relevant sources.

These suspicions can arise from a number of ways including consumer complaints, dominance by a single company in a specific sector or information shared by a whistleblower amongst other.

Section 5 of the Competitions Act 1998 outlines the CMA’s power to investigate where it suspects there is, or at some time in the past has been, an agreement which:

1. may affect trade within the United Kingdom; and
2. has as its object or effect the prevention, restriction or distortion of competition within the United Kingdom.

The CMA possesses extensive investigative powers, enabling it to compel businesses and individuals to provide documents and information. It also has the power to conduct interviews and ask questions with respect to any matter relevant to the investigation.

Importantly, the CMA’s information gathering powers do not extend to documents that are protected by legal professional privilege (LPP). Special arrangements can be made to isolate such LPP material to ensure that the investigating team does not secure access to it. Anyone who wishes to exclude such material from a CMA search should contact the team at KANGS for legal advice.

The outcome of a CMA investigation will depend on what is discovered and the seriousness of the suspected wrongdoing. However, the CMA may also close the case if it decides that you have not broken the law, or it may close the case without reaching a view on whether the law has been broken.

If wrongdoing is found, you may choose to accept undertakings to address the CMA’s concerns. This could include taking prompt action to effectively correct any harm caused and amend your practices.

You may choose to enter into a settlement, which involves admitting that you have broken the law, taking steps to stop the breach, and complying with a final infringement notice.
Where breaches are found, the CMA has the power to impose substantial financial penalties and, in serious cases, seek the disqualification of company directors.

If a settlement cannot be reached with the CMA, the matter may proceed to a Competition Appeal Tribunal for a final determination.

The CMA also has powers to bring criminal prosecutions in instances where anti-competitive practices are discovered (cartel behaviour and price fixing) and it is deemed in the public interest to bring a criminal prosecution as opposed to pursuing civil sanctions.

Our Expertise

The team at KANGS, led by Hamraj Kang is experienced in all aspects of criminal and civil fraud investigations. We are uniquely placed to advise clients as to both the potential civil and criminal liabilities in cases instigated by the CMA. We have the expertise and experience to act in simultaneous civil, criminal and regulatory investigations and our clients greatly value this coordinated approach.

We act for companies and senior management in all types of inquiries and investigations conducted by the CMA. Our expertise is drawn from dealing with not just the CMA but other law enforcement agencies such as the SFO, FCA and HMRC.

We provide advice and guidance in relation to dawn raids, dealing with notices served by the CMA, interviews, settlement negotiations and representation before the tribunal or court.

We are aware of the reputational risk attached to companies and individuals of a CMA investigation. Our Team is experienced in addressing such issues promptly and with discretion as and when they arise in the scope of an investigation.