Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
Investigations – general
On what grounds may the enforcement authorities commence an investigation?

Answer ... Section 25 of the Competition Act sets out the legal basis for the Competition and Markets Authority (CMA) to commence enforcement activities under the Chapter I prohibition. The CMA cannot use its statutory powers unless it has sufficient evidence to give it reasonable grounds to suspect that an infringement has taken place. The CMA will typically be alerted to this evidence in one (or a combination) of three ways:

  • a complaint from a third party;
  • an application for leniency/whistleblowing; and/or
  • evidence obtained as a result of the CMA’s market monitoring function.

The CMA considers all complaints it receives, but is not compelled to formally investigate all suspected breaches of competition law. If the CMA decides not to prioritise a suspected infringement, it may send an advisory or warning letter to the company or companies that are the subject of a complaint.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What investigatory powers do the enforcement authorities have in conducting their investigation?
Investigatory power Civil/administrative Criminal Order the production of specific documents or information Yes Yes Carry out compulsory interviews with individuals Yes Yes Carry out an unannounced search of business premises Yes* Yes* Carry out an unannounced search of residential premises Yes* Yes* Right to ‘image’ computer hard drives using forensic IT tools Yes Yes Right to retain original documents Yes Yes Right to require an explanation of documents or information supplied Yes Yes Right to secure premises overnight (eg, by seal) Yes Yes

The CMA does not have the power to search a person in civil investigations and cannot force a business to provide answers that would result in an admission that it has infringed competition law.

In criminal investigations only, the CMA and the Serious Fraud Office (SFO) have the power to access communications data (including telephone and messages records) of the individuals under investigation.

The CMA/SFO also has the power to compel individuals to answer questions if they relate to a criminal cartel investigation, but any statements made in response to mandatory interview questions may not be used against that person upon prosecution for the cartel offence.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
To what extent may the enforcement authorities cooperate with their counterparts in other jurisdictions during their investigation? How common is such cooperation in practice?

Answer ... The CMA is currently part of the European Competition Network (ECN) and cooperates with other ECN members in relation to identification of suspected infringements and ongoing investigations. After Brexit, the CMA will leave the ECN, but a close degree of cooperation between the CMA and the ECN is still expected after Brexit.

The CMA will also liaise with non-ECN competition authorities where appropriate. For example, in October 2018 the CMA opened an investigation into the Atlantic Joint Business Agreement and noted it was liaising with the European Commission and the US Department of Transportation in relation to the investigation.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
Is there an opportunity for third parties to participate in the investigation?

Answer ... Third parties may be contacted by the CMA and required to provide evidence from as early as the initial state of the CMA’s investigation. If the CMA’s provisional view is that the conduct under investigation amounts to an infringement, the CMA will issue a statement of objections together with an announcement on its case page.

The CMA may also provide an opportunity for third parties to submit written representations on a non-confidential version of the statement of objections if they are:

  • the original complainant; or
  • a third party that:
    • the CMA thinks will be directly and materially affected by the outcome of the CMA’s investigation, but has not made a complaint to the CMA;
    • is likely to materially assist the CMA with its investigation; and
    • has requested the opportunity to comment on the statement of objections.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What are the general rights and obligations of the enforcement authorities during the investigation?

Answer ... The CMA has the investigatory powers set out in response to question 3.2.

The CMA is also subject to a general commitment to act with transparency – on this basis, the CMA seeks to keep parties abreast of developments in the investigation and ensures that updates and decisions are made available to the public via its website.

The CMA also has further obligations around the handling of sensitive information received in the course of an investigation, and must consider – although it is not bound by – representations from parties as to the confidentiality of any materials provided.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What are the general rights and obligations of the target company during the investigation?

Answer ... The party under investigation has general rights of defence. Parties are entitled to receive key evidence and information about the CMA file, and to request copies of additional documents where necessary. In addition, parties are given the right to make submissions in respect of the CMA’s position at various stages of the investigatory process, including the right to reply, a key part of the procedure enabling the parties concerned to submit their response to the matters set out in the statement of objections.

Once an investigation has been opened, the parties are obliged to cooperate with written requests for information and searches of business and domestic premises, and the CMA may require individuals connected with a business to answer questions at interview. Offences and/or sanctions may apply to parties that fail to comply with such steps.

Parties under investigation have the right to make representations as to the confidentiality of information shared with the CMA during the investigation. If the CMA considers such representations to be valid, it may take a range of steps to shield such information from disclosure, including aggregation or anonymization of data, excision of certain information or provision of data ranges.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What principles of attorney-client privilege apply during a cartel investigation?

Answer ... Under English law, privileged communications are communications either between a professional legal adviser and client or made in connection with, or in contemplation of, legal proceedings, including communication with both in-house and private practice counsel. The English rules on privilege apply where the CMA conducts an inspection on its own initiative, or on behalf of the European Commission or a competition authority of another EU member state.

When the CMA is only assisting the European Commission with an investigation in the United Kingdom, EU rules of privilege apply, meaning that legal advice provided by in-house counsel and lawyers not qualified in an EU member state is not considered privileged.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
Are details of the investigation publicly announced? If so, what principles of confidentiality apply?

Answer ... The CMA will generally publish a notice of investigation on its website shortly after opening the formal investigation. The notice will include basic details of the case and a brief summary of the suspected infringement and industry sector involved. The CMA will not normally publish the names of the parties at this stage but will do so later in the process and if a statement of objections is issued. However, the CMA will generally not publish or update any notice where doing so may prejudice the investigation – or any criminal investigation or company disqualification order investigation – connected with that case.

It is the CMA’s normal practice to publicly announce the issue of the statement of objections on its website, together with a short summary of the statement of objections along with an announcement to the media, and on the Regulatory News Service where the matter is judged market sensitive.

If an infringement decision is issued, the CMA will normally issue a press announcement (including on the Regulatory News Service), as well as a formal announcement on its own website and case page.

The CMA is under a statutory duty to protect confidential information it receives during the course of any investigation; this applies to confidential information relating to individuals and companies. Such information may be disclosed only under limited statutory ‘gateways’. Restrictions on other disclosures of confidential information apply to both the CMA and other recipients; a person making an unlawful disclosure commits a criminal offence.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP