CMA ordered to provide further information on delays in competition investigation

03/06/20

The Competition Appeal Tribunal (Mr Justice Morgan, Eamonn Doran and Sir Iain McMillan) has handed down an important judgment on disclosure by the Competition and Markets Authority (CMA) in appeals against infringement decisions under the Competition Act 1998.

In its appeal against a penalty decision made by the CMA, FP McCann Limited contends that the length of the CMA’s investigations into its conduct was unreasonably long.  The investigation started not later than August 2012 (and it seems earlier) and the final decision in the civil case was not rendered until late 2019.  During this time, FP McCann’s turnover had increased considerably due to acquisitions it had made.  FP McCann therefore contends in its appeal that the unreasonable delay it alleges in the CMA’s investigations had a significant adverse impact on its penalty (since the maximum penalty is linked to turnover). In evidence served with the CMA’s Defence, the CMA revealed for the first time that no progress had been made in its investigation under the Competition Act 1998 for a period of over a year following the decision formally to open it. The CMA relied on various difficulties in conducting that investigation in parallel with a criminal investigation under s.192 of the Enterprise Act 2002 into the same conduct, but gave no details of those difficulties.

In its judgment, the Tribunal held that the Appellant was entitled to know in advance of the final hearing of the appeal what the difficulties relied on by the CMA were. It held the best way of doing that was for the CMA to file a witness statement setting out the typical difficulties which it encountered in conducting investigations under the Competition Act 1998 and the Enterprise Act 2002 in parallel. If the CMA wished to argue that those difficulties applied in the present case, it could either (a) rely on an inference to that effect, or (b) disclose internal CMA documents supporting its position. If it chose to disclose no documents, however, the Tribunal might draw adverse inferences against it at the final hearing of the appeal. The CMA was also ordered to inform the Appellant of the date on which its investigation under the Enterprise Act 2002 in fact began and the exact date on which its investigation under the Competition Act 1998 resumed, and the step which the CMA says constituted its resumption.

The judgment discusses other matters which are likely to be of interest in other cases, including the ambit of litigation privilege during CMA investigations under both the Competition Act 1998 and the Enterprise Act 2002 and the relevance of the CMA’s interest in maintaining confidentiality over its internal decision making processes to applications for disclosure.

The judgment is here.