CMA blog on how the CMA investigates cartels
On 6 September 2019, the Competition and Markets Authority (CMA) published a blog, How the CMA investigates cartels, by Ashley Wakeman, principal investigation officer at the CMA. This explains the tools at the CMA’s disposal to expose cartels, such as gathering covert intelligence or turning up at company offices to search them unannounced.
The blog explains how cartel investigations are started, from the CMA’s own intelligence gathering activities, anonymous tip-offs or companies/individuals applying for leniency. As regards whistle-blowing, the CMA noted that the identity of the whistle-blower is kept confidential and the CMA is not able to rely on information provided by the whistle-blower in any enforcement action. Rather, the CMA will use the information to help it look for information. This contrasts to the position of leniency applicants, where the identity of the applicant is known to the case team and the applicant can be asked to provide evidence (including acting as a witness) as a condition of their leniency.
The blog then lists the CMA’s formal investigation powers, including the powers to turn up and search company offices unannounced and request information and documents (also known as “dawn raids”), to search the home addresses of individuals if the CMA suspects that there will be relevant documents there, to interview people, either using compulsory interview powers or on a voluntary basis and to compel companies or individuals to give the CMA information or documents.
The blog then moves on to look at the next steps, in particular sending the businesses involved a Statement of Objections. This is a document which outlines the CMA’s initial findings in the cartel investigation and gives the parties an opportunity to reply. After this, the case may proceed to a final published CMA decision.
In criminal cases, the CMA will also carry out an assessment on whether there are sufficient grounds for any individual to be charged and prosecuted. If prosecuted, individuals have a chance to respond to the allegations, and then the case will go to a criminal trial at the Crown Court.
The CMA can also apply to the court for the directors of companies guilty of cartel behaviour to be disqualified from acting as company directors for up to 15 years. A recent example of enforcement activity is a case the CMA completed in the office fit-out sector, where the companies involved in illegal bid-rigging were fined over £7 million and the CMA was able to disqualify six directors for periods of between 18 months and five years (Anti-competitive practices in design, construction and fit-out services sector).