Responding to a CMA investigation

The CMA investigates consumer protection breaches. Common triggers include:

• Unfair terms in consumer contracts — grey-listed terms under the Consumer Rights Act 2015
• Misleading practices — false or misleading information about products, prices, or services
• Subscription and auto-renewal practices — inadequate cancellation rights under the DMCC Act
• Anti-competitive behaviour — price-fixing, market sharing, abuse of dominant position
• Failure to honour statutory rights — refunds, repairs, replacements under the Consumer Rights Act 2015

Once you have legal advice, work through the following with your solicitors:

• What conduct is alleged and which legislation is cited?
• What evidence do you hold? (Contracts, complaints records, pricing data, training records)
• What is the period under investigation? (Fines reflect duration of breach)
• What is your worldwide annual turnover? (CMA can fine up to 10% of global annual turnover)

The CMA has a formal investigation process. Your obligations during this process are legally binding.

• Respond to information requests in full and on time — failure attracts daily penalties of up to 5% of worldwide daily turnover
• Implement a legal hold — instruct all relevant staff not to delete or alter documents
• Request an extension before any deadline if you need more time — do not simply miss a deadline
• Do not contact other businesses under investigation — this could constitute separate competition law breaches

At any point during an investigation, your business can offer undertakings — binding commitments to change practices. Undertakings can avoid formal proceedings, reduce penalties, and give you greater control over the outcome. Discuss this with your legal advisers early.

• Undertakings are legally binding — breach attracts a penalty of up to £150,000 or 5% of global turnover (fixed), or 5% of daily turnover if calculated daily
• The CMA can require redress measures (compensation to affected consumers) as part of undertakings or a final decision
• Cooperation and voluntary remediation are formal mitigating factors in penalty calculations

A CMA investigation can result in:

• No action — the CMA does not find a breach
• Undertakings — binding commitments to change practices, negotiated without formal proceedings
• Directions — formal order to stop the infringing conduct
• Financial penalty — up to 10% of global annual turnover for a breach; up to 5% of daily turnover for procedural non-compliance
• Enhanced consumer measures — redress to affected consumers, compliance programmes, or choice measures
• Court action — the CMA can also pursue injunctions and seek consumer redress through the courts

CMA decisions can be appealed to the Competition Appeal Tribunal (CAT). A CMA finding can also be used by affected consumers as the basis for individual civil claims.