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Global Competition Law

Where the CMA decides that there is an adverse effect on competition, it is required to determine whether it should take action itself, or recommend others do so for the purpose of remedying, mitigating or preventing the adverse effect on competition or any detrimental effect on customers, to the extent that such an effect has resulted from, or may be expected to result from, the adverse effect on …

Powers of investigation

 Complaints alleging a breach of a prohibition may be made to the CMA or to a sector Regulator if appropriate. The OFT - whose competition-related functions are now entrusted to the CMA - published a Guideline on the submission of complaints (OFT 451), whose Annex B details the information which should be provided by the complainants and recommends that complaints not be made anonymously, so it is easier to seek clarification and information. Moreover, in order to help the speedy handling of complaints, the Guideline provides in certain circumstances for letters from complainants to be disclosed to the target of the complaint.

Complaints

On 20 June 2003, the super-complaints provisions of Section 11 of the 2002 Act entered into force. They authorize designated consumer bodies to make “super-complaints” where there are market features that may be harming consumers to a significant extent. Relevant market features that could give rise to a complaint include the market structure or the general conduct of firms operating in the market. Any body that represents the interests of consumers of any description and which meets other criteria published by the SoS's Guidance for prospective designated super-complaints bodies may be deemed eligible to make super-complaints. So far, the SoS designated: The Campaign for Real Ale Limited (CAMRA), The Consumer Council for Water, The Consumers' Association (trading as "Which?"), The General Consumer Council for Northern Ireland (GCCNI), National Association of Citizens Advice Bureaux (NACAB), The National Consumer Council (trading as "Consumer Focus") and The Scottish Association of Citizens Advice Bureaux (trading as Citizens Advice Scotland (CAS)).

The CMA has up to 91 days to respond to a super-complaint. The answer will state whether the CMA has decided to take action, and if so, what action it proposes to take. The 2002 Act does not limit the types of action allowed. Outcomes may include investigations into the market, enforcement action under the 1998 Act, recommending changes to legislation or referring the market to the CMA for further investigation. Super-complaints may also be made to sectoral Regulators in relation to particular markets (see OFT's Super-complaints: guidance for designated consumer bodies, OFT 504).

Super-complaints

The 1998 Act introduced wide ranging changes as regards procedure and enforcement under UK competition law. This new approach is effect-oriented, rather than placing an emphasis on form. These changes created a need for wider investigative and enforcement powers. The CMA operates under a system not unlike that of the European Commission, and the new powers are based on Articles 17-20 of EU Regulation No 1/2003. The Enterprise and Regulatory Reform Act 2013, which entered into force in April 2014 further enhances the investigative powers of the CMA. Under Sections 26 to 29 of the 1998 Act, the OFT is empowered to do any of the following:

- require the production of specified documents;

- require the provision of any specified information;

- require individuals having a connection with a relevant undertaking to answer questions with respect to any matter relevant to the investigation;

- enter and search premises without a warrant after giving two-days working notice, require the production of any relevant documents and explanations;

- without giving notice, enter and search premises with a High Court warrant where there are reasonable grounds to believe that a document will be destroyed or where entry without a warrant has been refused. The Enterprise and Regulatory Reform Act 2013 amended Sections 28 and 28A of the 1998 Act in order to extend the High Court's power to issue warrants to the CAT.

The CMA may open an investigation if there are reasonable grounds for suspecting a violation of the prohibitions set out in Chapters I and II. The formal powers of investigation cannot be used unless an investigation is opened based on such reasonable grounds for suspicion. Reasonable grounds may include inter alia incriminating copies of secret arrangements provided by members of a cartel, statements from employees or complaints. Further, the CMA may require any person to produce documents or information that relate to any matter relevant to the investigation. The notice requiring information can be served upon the undertakings concerned and on third parties, such as complainants, suppliers, customers and competitors. The CMA can take copies or extracts of documents and require explanations. The time-limit for producing documents is set by the CMA on a case by case basis.

When on the premises of the suspected undertaking, the investigating officer may require the production of documents on the premises, take copies or extracts of the documents produced and require explanations regarding the documents. The officer also may take any equipment deemed necessary, such as portable computers or tape recording equipment or require any relevant information electronically stored to be produced in a form that can be read and taken away, and take steps necessary to preserve documents or prevent interference with them. The premises also include vehicles and domestic premises if the home is used in connection with the business or if business documents are kept there, but their access to is conditional on a warrant being produced.

New Section 31F of the Act, introduced by the Enterprise and Regulatory Reform Act 2013, grants the Secretary of State the power to impose time-limits in relation to the conduct of investigations by the CMA or to the making of decisions by the CMA as a result of investigations.

For more detailed rules, practitioners should refer to Guidance on the CMA’s investigation procedures in Competition Act 1998 cases - CMA8 of 12 March 2014.

Under Section 30 of the Competition Act, no person shall be required to produce or disclose a privileged communication, i.e. a communication between a professional legal advisor and the client, or a communication made in connection with legal proceedings for the purposes of these proceedings. In contrast to EU law, the term professional advisor extends to in-house counsel and non-qualified lawyers under the laws of the Member States.

More generally, an investigating officer has no power to order the production of documents unless the officer considers that the document relates to a matter relevant to the investigation (Section 26(1)). Thus, investigating officers have no right to conduct fishing expeditions.

Part 9 of the 2002 Act included new requirements for safeguarding certain information and laid down the requirements to be met before public authorities, including the CMA, may disclose such information. The general rule is that “specified information” which relates to the affairs of an individual or of any business of an undertaking must not be disclosed during the lifetime of that individual or undertaking (Section 237 of the Act). Section 243 of the Act provides some leeway for disclosing information to overseas public authorities under certain circumstances, despite the general prohibition under Section 237.

Neither, as is the case under EU law, are undertakings compelled to answer questions that may lead to self-incrimination.

Rights of the investigated undertakings

  Enforcement proceedings are carried out over two stages. Where the CMA considers that an infringement of the Competition Act 1998 may have occurred, it will carry out an investigation pursuant to Section 25. Where the investigation leads the CMA to consider that there has been a breach of Chapter I or Chapter II, then pursuant to section 31 of the Act it must, before taking the decision, give the undertakings concerned a chance to defend themselves.

  If the CMA considers that there has been an infringement, it must notify a Statement of Objections to the parties who have an opportunity to respond before the CMA issues its final decision.

  The CMA can accept binding commitments of the parties at any time during the investigation until a decision is made. A formal settlement may also be reached with addressees of the Statement of Objections by early resolution agreements. In return for an admission of liability and an agreement to cooperate, the CMA will lower the fine.

Two-stage proceedings

Under the previous competition regime, serious harm could be inflicted on a company before the competition authorities were able to intervene. Since 1998 (Section 35 of the Competition Act), the CMA has the authority to adopt interim measures where the circumstances so require pending a final decision. It may be necessary to act urgently to prevent damage where, for example, a smaller competitor is put out of business or is suffering a considerable competitive disadvantage as the result of apparently abusive conduct from another dominant undertaking on the market.

Interim measures may be awarded by the CMA sua sponte or upon request by a complainant. The measures may, inter alia, require the undertaking concerned to terminate an agreement, cease conduct, or modify an agreement or conduct. Contrary to EU law, measures are not required to be temporary or limited to what is strictly necessary. The Enterprise and Regulatory Reform Act 2013, which entered into force in April 2014, lowered the threshold for the granting of interim measures. 

- there exists a reasonable suspicion that the Chapter I or Chapter II prohibition has been infringed;

- it is necessary to act urgently either to prevent “significant damage” to a particular person or category of persons, or to protect the public interest. Previously, the OFT would only be able to act to prevent “serious and irreparable damage”.

Interim relief

The 2002 Act repealed the former FTA 1973 monopoly inquiries and replaced them with market investigation references from the OFT to the Competition Commission. The Government intended market investigation references to focus upon the function of a market as a whole rather than the conduct of a single firm in a market. Pursuant to Section 131 of the 2002 Act, the OFT would make a market investigation reference to the Competition Commission where it had reasonable grounds for suspecting that any feature, or combination of features, of a market in the UK for products and services prevented, restricted or distorted competition in connection with the supply or acquisition of any products and services in the UK or part thereof. However, a reference could not be made by the OFT where a commitment had been accepted in lieu of a reference (officially called "undertaking in lieu of reference") or where a ministerial reference of the same matter had been made but not yet ruled on by the Competition Commission.

Under Section 131(2) of the Act, a “feature of a market” refers to:

- the structure of the market concerned or any aspect of its structure;

- any conduct (whether or not in the market concerned) of one or more than one person who supplies or acquires goods or services in the market concerned;

- any conduct relating to the market concerned of customers of any person who supplies or acquires goods or services.

Under the Enterprise and Regulatory Reform Act 2013, the Competition and Markets Authority (CMA) is entitled to carry out “cross market investigations” i.e. investigations in relation to more than one market in the United Kingdom for products or services. Under Section 130A of the 2002 Act, where the CMA intends to carry out a market investigation, it must publish a market study notice which specifies the matter in relation to which it is proposing to carry out its functions, the period during which representations may be made to it in relation to the matter, and the dates by which it is required to complete the study. Within six months of such publication, the CMA must publish its proposal to make a reference under Section 131 or not to make a reference in spite of a representation made to it to that effect and carry out consultations with the interested persons, or not to make a reference where there has been no representation made to that effect. Within the period of 12 months beginning with the date on which the CMA publishes the market study notice, it must prepare and publish a report setting out its findings in relation to the matter specified in the notice; and the action (if any) which it proposes to take in relation to the matter. Where a market study report contains a decision of the CMA to make a reference under Section 131 in relation to a matter, the CMA must, at the same time as it publishes the report, make the reference. 

Market investigations

Where the CMA decides that there is an adverse effect on competition, it is required to determine whether it should take action itself, or recommend others do so for the purpose of remedying, mitigating or preventing the adverse effect on competition or any detrimental effect on customers, to the extent that such an effect has resulted from, or may be expected to result from, the adverse effect on competition.

In either case, if action is taken, the CMA decides what action should be taken and what is to be remedied, mitigated or prevented.

Pursuant to the amendments brought by the Enterprise and Regulatory Reform Act 2013, the CMA now has 18 months to complete the investigation, instead of the previous 24.

Further information on market investigation references can be found in the OFT's Guidance about the making of reference under Part 4 of the Enterprise Act (OFT 511) published in March 2003 and the Competition Commission's Guidelines on market investigation references (June 2003).

Global Competition Law

1402. Powers of investigation

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Les notions juridiques connexes

1402. Powers of investigation

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

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