Reed Smith Client Alert

The UK’s new competition body, the Competition and Markets Authority (CMA), was officially launched on 1 October 2013. It will acquire most of its substantive powers in April 2014, when it will officially replace the Office of Fair Trading and the Competition Commission.

The launch was preceded by the publication of Draft Guidance1 on the authority’s new powers under the Enterprise and Regulatory Reform Act 2013 (the “2013 Act”), such as its powers to investigate potentially anti-competitive behaviour. Of particular concern is the CMA’s new power to interview individuals.

How does the CMA’s new power work?

This new power raises a number of concerns:

  • Individuals need not be employees or directors of the business concerned – they might, for example, be former employees.
  • If the CMA does choose to interview an individual, it will provide the individual (and the business concerned) with a formal interview notice before carrying out the interview. However, in some circumstances (for instance, where there is a “time-critical element”) the CMA may not provide any notice.
  • Although individuals will be able to request to have a legal adviser present, the CMA is only obliged to wait a “reasonable time” before conducting the interview in the absence of a legal adviser.
  • Whilst the CMA may permit the individual to choose the legal adviser of the business concerned (either in-house or external), where there is a risk that this may prejudice the investigation, the individual may be required to choose an alternative legal adviser.
  • When individuals are interviewed during a dawn raid, it may prove difficult to identify at short notice a lawyer who is not a member of the firm that normally advises the company under investigation.
  • Recent CMA statements give rise to some uncertainty as to whether, in the CMA’s view, an individual would be entitled to assert privilege against incriminating the investigated company (of which he may be an employee and/or a board member) whilst being interviewed in his “individual” capacity.

What does this mean for businesses?

Companies should review their dawn raid and compliance policies, with a particular focus on improved legal protection for employees, including arrangements for separate, independent representation, on the basis that the business’ own legal advisers may be unable to act.

1. See

Client Alert 2013-264