• Register
Return to: Home > Comments > Legal Watch: What to do when the competition authorities come knocking

Legal Watch: What to do when the competition authorities come knocking

The Competition Commission’s (CC) market investigation into the supply of statutory audit services to large companies was initiated in October 2011 by a reference made by the Office of Fair Trading (OFT). 

Both the OFT and the CC have expressed the preliminary view that the market is characterised by limited rivalry. The CC has identified the predominance of the Big Four as leading to possible adverse effects on audit quality, pricing and competition in non-auditing markets. 

The powers of the CC are extensive, including the ability to compel information via information requests; however the possibility of more stringent measures such as “dawn raids” also exists.
Whenever an industry sector comes under the competition law microscope this is always a potential. In broad terms, the OFT has the power to carry out unannounced, on-site inspections with the aim of obtaining relevant documentation.

Of course in this instance the risk of a “dawn raid” taking place is low, but companies should always remain prepared.

To minimise the risk precautionary measures should be implemented. At the very least a company should: (i) identify and isolate privileged information to mitigate the risk of inadvertent disclosure and a waiver of privilege issues; (ii) conduct an audit of potentially damaging material, for example by reference to individuals working in “risky areas”; (iii) provide competition law compliance training for staff. As the front line interface, security and reception personnel need to know what to say and who to call when officials first arrive, as failure to comply with the duty of cooperation can result in fines being imposed. Managing a raid effectively is equally as important. In the first instance, inform a member of your legal team and put into place your “dawn raid” procedures.

These can and should be tested with “mock” raids which your legal team should be able to organise. It is important that no document or record is destroyed or removed from the site and that the investigation is not disclosed externally. The aim, after all , is to allow the officials to complete their work as quickly as possible, with minimal disruption to the business while ensuring that they do not exceed their powers.

Jane Howard is a partner in Wragge & Co’s professional liability group. 

Top Content

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more


    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.