Competition and Markets Authority Investigations

What Triggers a CMA Investigation?

There are several ways a CMA investigation might begin:

• Merger Reviews: When large companies propose mergers or acquisitions, the CMA assesses whether the deal could reduce competition in a particular market. This often involves a two-phase process, and the CMA may request additional information or propose remedies to address competition concerns.
• Market Investigations: The CMA can launch in-depth investigations into specific sectors if they suspect widespread anti-competitive practices, such as price fixing or market dominance by a single player.
• Consumer Complaints: Individuals or businesses can report suspected breaches of consumer protection laws, like misleading advertising or unfair contract terms. The CMA may then open an investigation based on the complaint.
• Whistleblower Reports: Those with knowledge of anti-competitive behaviour within a company can confidentially report it to the CMA, potentially triggering an investigation.

Types of CMA Investigations:

The CMA conducts different types of investigations depending on the specific concerns:

• Market Inquiries: These in-depth investigations delve into the workings of a particular market, looking for evidence of anti-competitive practices. The CMA may interview businesses and consumers, gather data, and hold public hearings.
• Merger Investigations: As mentioned earlier, the CMA assesses proposed mergers for potential competition concerns. They may require additional information or propose remedies like asset sales to address these concerns.
• Cartel Investigations: Cartels are groups of companies that agree to fix prices, divide markets, or restrict competition. The CMA has strong powers to investigate and prosecute cartels, which can lead to hefty fines and even criminal charges.

The CMA Investigation Process:

A CMA investigation typically follows these steps:

• Information Gathering: The CMA will request information from the company under investigation, such as internal documents, emails, and communications.
• Interviews: The CMA may interview company representatives and other relevant individuals to gather further details.
• Dawn Raids: In serious cases, the CMA may conduct unannounced dawn raids on company premises to seize documents and electronic data.
• Statement of Objections: If the CMA finds enough evidence of wrongdoing, they will issue a Statement of Objections outlining the alleged breaches.
• Response and Negotiations: The company can then respond to the Statement of Objections and negotiate with the CMA to reach a settlement.
• Referral to Tribunal: If a settlement isn’t reached, the CMA can refer the case to a competition tribunal for a formal decision.

What to Do During a CMA Investigation:

If your business is under CMA investigation, it’s essential to seek legal advice promptly. Jeremy Gordon can guide you through the process, ensure you comply with information requests, and represent your best interests during negotiations.

Possible Outcomes of a CMA Investigation:

The outcome of a CMA investigation can vary depending on the severity of the alleged wrongdoing and your cooperation level. Here are some potential results:

• No Further Action: If the CMA doesn’t find enough evidence, they may close the investigation with no further action.
• Acceptance of Undertakings: You may agree to change your business practices to address CMA concerns and avoid further action.
• Fines: The CMA can impose significant fines for breaches of competition or consumer protection laws.
• Disqualification Orders: In severe cases, the CMA may disqualify individuals from holding director positions.
• Referral to Tribunal: If no settlement is reached, the case could be referred to a competition tribunal for a binding decision.