Competition law investigations will be conducted by the nation's relevant body which is responsible for enforcing competition laws. For example, in the UK the relevant body for conducting competition law investigations is the Competition and Markets Authority (CMA). These investigations will be conducted following the report of anti-competitive activity by either organisations or employees. Competition law investigations are essential in the crackdown on anti-competitive behaviour, which has intensified following the CMA's 2017 report.
What is involved in competition law investigations?
Regarding the UK situation, the competition laws which exist are the Competition Act 1998 and the Enterprise Act 2002. If an organisation is found guilty of infringing either of the above Acts, the CMA is the body responsible for investigating this. Chapters I and II of these acts stipulate the agreements which can be infringed by organisations; for example, an agreement which involves price fixing or sharing of market information is not tolerated by competition law.
Investigations in competition law will begin following the report of anti-competitive behaviour. The CMA will conduct an investigation following an organisation or individual reporting themselves, a report from a third party or a suggestion of a breach which reaches the CMA. Once these reports have been registered and determined to class as anti-competitive offences, the investigation process will commence.
The competition law investigation process is a long process and can sometimes conclude up to several years after the reported date. This is because a vast set of information needs to be analysed in order to decide whether it is anti-competitive or not. To gain information and evidence, the CMA will conduct interviews, send requests to access particular information and carry out dawn raids. The CMA will then investigate the previous actions of the individual or organisation under investigation, in order to penalise and hold them accountable for all of their conduct which can be considered anti-competitive.
What is the settlement process involved in a competition law investigation?
During the period of information analysis, the individual or organisation under investigation has the option to decide upon a settlement. To achieve a settlement early, you can plead guilty to your anti-competitive behaviour, allowing the CMA to speed up the investigation and conclude it with reduced severity in fines and penalties. CMA can reduce fines by up to 20% if they believe that the settlement is fair.
What is involved in the decision process which concludes the competition law investigation?
The investigation process will conclude with the decision process. This decision process will be conducted by the Case Decision Group, who analyse all the information and evidence gathered, as well as taking into consideration whether any settlement decision was decided upon or not. The Case Decision Group will be independent of the investigating team and the respective officers. This is to ensure that the decision is fair and decided upon by a range of people.
If the CMA decides that an individual or an organisation are guilty of anti-competitive behaviour, it will be issued with an infringement decision. Following this, the CMA's decision will be published online and this effectively tarnishes the reputation of an individual or an organisation.
The penalties which will be inflicted could be up to 10% of an organisation's global turnover, a prison sentence or the disqualification of a director for up to 15 years. Therefore, avoidance of competition law investigations and the subsequent penalties is of utmost importance if you want to avoid financial repercussions and the tarnishing of your - or your organisation's - reputation.