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CMA clarifies leniency application procedures

06/11/2017
The CMA has now clarified its relationship with sectoral regulators with regard to how applications for leniency will be handled.

The CMA has now clarified its relationship with sectoral regulators with regard to how applications for leniency will be handled.

In the UK a number of sectoral regulators have concurrent powers to apply competition law, these companies made up the UK Competition Network and include the CMA, Ofcom, Ofgem, Ofwat, Financial Conduct Authority, Office of Rail and Road, Civil Aviation Authority, the Northern Ireland Authority for Utility Regulation and the Payment Systems Regulator. When imposing fines and determining the appropriate level of the fine, the CMA and sectoral regulators are required to have regard to guidance on the appropriate amount of the penalty which provides for the grant of leniency to businesses who inform the CMA or other regulators about the existence of a cartel which would otherwise have remained hidden.

In June 2017, the CMA opened a consultation on the arrangements for handling leniency applications within the UK Competition Network. Following consideration of the responses, an information note has now been published which confirms how leniency applications will be dealt with.

Confirming arrangements which have previously been operated on a case-by-case basis, the CMA has made clear that it should now be the first point of contact for all leniency applications in regulated sectors. This does not affect the concurrency regime and issues such as case allocation or the grant of leniency, but rather means that any company wishing to secure their place in the leniency queue should contact the CMA first. Any approach to a sectoral regulator will result in that regulator directing the company seeking to make a leniency application to the CMA instead.

Time is of the essence in leniency applications and a leniency applicant's place in the queue for leniency will be determined by the order in which the application was made to the CMA. Applications to other regulators will not be considered as securing a place in the queue.

The changes are aimed at:

  • Making it clear that Type A or Type B immunity from fines can only be granted to the first company to apply;
  • Maximising the incentive to apply for leniency early;
  • Allowing for certainty regarding an applicant's place in the queue and reducing the risk that a company may lose out where there has been the transfer of the case from one authority to another;
  • Reducing the burden on businesses by ensuring they only have to make one leniency application within the UK (the arrangement does not reduce the need for an applicant to apply for leniency to a non-UK authority to obtain protection under another regime, either European Commission or other National Competition Authority); and
  • Avoiding duplication of work by the regulators.

Although aimed at simplifying the procedure for businesses, the process of applying for leniency is one on which specialist advice should be taken. Fieldfisher is experienced in assisting companies in making applications for leniency in both the UK and to the European Commission and can help to ensure that the best possible outcome is secured for a business if compliance with competition law is a concern.

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