Competition and Enterprise, Office of Fair Trading, Corruption

Competition Act Offences

The key competition Act offences relate to:

  • Anti-competitive agreements and practices;
  • Abuse of dominant market positions;
  • Monopolies.

These offences are investigated and prosecuted by the Office of Fair Trading (OFT), which has the power to impose substantial financial penalties.

During an investigation, the OFT has the power to require documents to be produced and explained and to enter premises to conduct searches.

A failure to comply with elements of an investigation, to obstruct or interfere with an investigation may constitute a criminal offence.

Anybody who has been served with any notice to provide information or documents or whose premises have been visited by investigators should contact us immediately.

Leniency Programme

In relation to cartel-type offences the OFT has a leniency programme.
This programme applies to agreements between organisations. Where an organisation is involved in agreements that concern price-fixing, bid-rigging, the setting of restrictions or quotas of output or market sharing, then an immunity from a financial penalty or a reduction of that penalty might be extended if the organisation comes forward and co-operates with the OFT.

If an organisation believes that it is involved in a cartel-style agreement and is concerned so as to take advantage of the leniency programme, they should contact us immediately, as the conditions attached to the leniency programme are rigorous and careful consideration needs to be given before an approach is made to the OFT.

Enterprise Act Offences

The Enterprise Act 2000 came into force on 20th June 2003 and one of its main provisions creates a cartel offence in relation to individuals. The cartel-type prohibitions contained within the Competition Act are still in force, but they relate to organisations, whereas the Enterprise Act deals with agreements between individuals.

Penalties

A conviction for a cartel offence is punishable by a maximum sentence of 5 years' imprisonment.

No action letters

There is a regime within the Enterprise Act where the OFT can issue a No Action letter against a person who reveals the existence of a cartel.
There are substantial conditions attached to a No Action letter requiring a need for continuing co-operation with the OFT and will also depend on whether the OFT were already investigating the cartel.

Competition Commission

The Enterprise Act also provides for the referral of a completed or anticipated merger to the Competition Commission and there are again criminal offences created for providing false or misleading information in an investigation into a merger referral or intentionally altering, suppressing or destroying documents where there has been a requirement to produce them.

Competition Disqualification Order

The Enterprise Act has also introduced the concept of a Competition Disqualification order for the disqualification of directors of companies where there have been breaches of competition law.

OFT Investigations

The OFT is responsible for investigating anti-competitive practices.
Investigations can commence in circumstances where someone has acted as a whistle-blower or where someone involved in an activity such as a cartel comes forward in the hope of avoiding prosecution.

An investigation may begin by officials of the OFT and/or EU investigators raiding premises early one morning to seize documents or by the service of notices requiring information and documents from persons or undertakings.
The nature of these investigations is usually complex and often takes a substantial period of time to resolve.

Those persons who believe they are involved in anti-competitive practices and who wish to try and take advantage of the leniency programme or the No Action letter system are able to make arrangements to contact the OFT anonymously.

If any person was intending to try and obtain a No-Action letter from the OFT they should take legal advice as there are numerous obligations to be met under the system. A failure to meet one of the conditions can result in a No-Action letter being revoked.

Dawn Raids

The OFT has been given powers that enable them to arrive unannounced and to enter and search premises. This is part of the investigative phase where explanations can be sought and documents removed.

This is obviously a difficult and stressful time for all concerned and there are many issues to be dealt with, including whether certain documents attract legal privilege, or ensuring that "obstruction style" offences are not committed that would lead to subsequent criminal liability.

We have a 24-hour emergency hotline which means that lawyers can attend premises where raids and searches are being undertaken at short notice.

Interviews

In addition to those situations where the OFT place a requirement on a person to furnish them with information and documents, circumstances might arise where it is proposed to interview people under caution. This would form part of any investigation with a view to possible criminal proceedings.

The significance of these interviews is that the replies may be used in criminal proceedings.

Contact us

We can provide experienced Solicitors to attend during searches, raids, interviews, as well as giving general advice on these issues.
If you have any questions concerning anything relating to Competition Act or Enterprise Act investigations, please contact us as soon as possible.