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Article England and Wales: Overseas Companies Required to Comply with UK Competition and Markets Authority Requests

On January 17, 2024, the Court of Appeal of England and Wales confirmed that the Competition and Markets Authority (CMA) has the power to require companies based overseas to produce documents and information when requested as part of an investigation into suspected anticompetitive conduct by a vehicle manufacturer. In this case, the CMA suspects Bayerische Motoren Werke AG (BMW AG), which is incorporated in Germany, of breaching section 2 of the Competition Act 1998 in the U.K. in relation to the recycling of old or written-off vehicles, which are known as end-of-life vehicles. The CMA further suspects that aspects of the conduct breaching the law in the U.K. occurred outside its jurisdiction.

As part of its investigation, the CMA requested BMW AG under section 26 of the Competition Act 1998 to provide documents that were located both within and outside of the U.K. While BMW AG produced the documents from its U.K. location, it did not provide information from its overseas locations, claiming the CMA did not have jurisdiction. The CMA subsequently imposed a 30,000-pound fixed penalty (about US$38,000) and a daily penalty of 15,000 pounds (about US$19,000) on BMW AG under section 40A of the Competition Act 1998 due to its failure to comply with an information request issued as part of an investigation into potential anticompetitive conduct.

BMW AG issued a legal challenge with the Competition Appeal Tribunal against the CMA. In response, the CMA in conjunction with the High Court of England and Wales published a combined decision that found in favor of the automotive manufacturer, ruling that only entities that had a territorial connection to the U.K. were under an obligation to comply with a formal information request. The decision served to limit the CMA’s power to issue these requests, which the CMA stated “was a critical part of its investigative armoury; if it could not use that power against foreign entities, then its ability to perform its statutory task would be badly compromised.”

The CMA obtained permission to appeal and won on all grounds. The Court of Appeal stated that if the CMA’s powers did not extend overseas, the CMA would not be able to conduct competition investigations effectively, which would cause “a perverse incentive for conspirators to move offshore to organise cartels directed at harming the United Kingdom market.” BMW AG has applied for permission to appeal.

The chief executive of the CMA stated that the judgment was important because the cases it investigates “increasingly involve cross-border, multi-national businesses[,] and information requests are a key tool by which we can investigate whether those businesses have been engaged in unlawful conduct.”

Clare Feikert-Ahalt, Law Library of Congress
April 29, 2024

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Chicago citation style:

Feikert-Ahalt, Clare. England and Wales: Overseas Companies Required to Comply with UK Competition and Markets Authority Requests. 2024. Web Page. https://www.loc.gov/item/global-legal-monitor/2024-04-28/england-and-wales-overseas-companies-required-to-comply-with-uk-competition-and-markets-authority-requests/.

APA citation style:

Feikert-Ahalt, C. (2024) England and Wales: Overseas Companies Required to Comply with UK Competition and Markets Authority Requests. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2024-04-28/england-and-wales-overseas-companies-required-to-comply-with-uk-competition-and-markets-authority-requests/.

MLA citation style:

Feikert-Ahalt, Clare. England and Wales: Overseas Companies Required to Comply with UK Competition and Markets Authority Requests. 2024. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2024-04-28/england-and-wales-overseas-companies-required-to-comply-with-uk-competition-and-markets-authority-requests/>.