Guidance

How to respond to a warning or advisory letter from the CMA

Information about what to do if you receive a warning or advisory letter from the CMA.

From:
Competition and Markets Authority
Published
14 January 2016

The Competition and Markets Authority (CMA) regularly receives complaints or other intelligence about businesses that may be breaking competition law. We aren’t able to prioritise them all for formal investigation. If we don’t prioritise a formal investigation in relation to an issue arising from your business practices, we may send you a warning or advisory letter instead.

We may send a number of similar letters to different businesses operating in the same market sector following receipt of a complaint or other information.

If you receive one of these letters from us, it doesn’t mean you’ve broken the law. It’s a prompt for you to review your business practices to make sure you’re complying with competition law.

Warning and advisory letters explained

The CMA uses warning and advisory letters to:

If you receive a warning or advisory letter from us it means we have concerns that your business practices could be harming competition in your market sector.

It’s likely that we’ve become aware of those business practices through our intelligence sources (for example, through complaints, calls to our cartels hotline or applications under our leniency programme.) Please note we can’t disclose information about our intelligence sources.

By sending you one of these letters we’re giving you an opportunity to carry out a self-assessment of your business practices. It doesn’t necessarily mean that you’ve broken the law but it’s important that you take the letter seriously, read it carefully and respond as requested.

If the CMA decides formally that you have broken competition law, the consequences can be serious and far-reaching:

  • businesses can be fined up to 10% of their annual turnover
  • company directors can be disqualified from managing a company for up to 15 years
  • people involved in cartels can face up to 5 years in prison

Our decision about which type of letter to send you will be based on various factors, including:

  • the seriousness of any potential anti-competitive practices
  • the strength of the evidence we have
  • the potential for the practices to harm competition in your market sector

A warning letter will:

  • explain our concerns about your business practices
  • recommend that you carry out a self-assessment of your business practices to ensure you’re complying with competition law
  • ask you to write to us with details of what you have done, or are planning to do, to ensure that you comply with competition law

An advisory letter will:

  • explain our concerns about your business practices
  • recommend that you carry out a self-assessment of your practices to ensure you’re complying with competition law
  • request that you let the CMA know you’ve received the letter

Steps to take in response to warning or advisory letters

The CMA has no specific legal power to make you respond to a warning or advisory letter. However, the next steps we will take are likely to depend in part on your response to our letter - so please consider your response carefully.

Remember that, while your matter is not a current priority for investigation by the CMA, we may still decide to launch a formal investigation at a later date. We may look again at your case if we receive more evidence or if our priorities change. If we then find that you’ve broken competition law, you may face a higher financial penalty if you didn’t act on the requests set out in our letter.

We also recognise that, after reading our letter and looking at your business practices in detail, you may consider that you aren’t breaking the law and no action is required.

The main steps we recommend you take to cooperate with us effectively are set out below.

Raise this letter as a critical issue with your senior managers

Share and discuss our letter with your senior managers or board of directors.

You may wish to speak to a legal adviser about the concerns raised by the CMA.

If you don’t have access to legal advisers, there may be other sources of advice you can turn to, such as the Competition Pro Bono Scheme. This scheme offers an initial free legal consultation. Other legal advisers may also offer advice on a similar basis.

The CMA is unable to provide legal advice in individual cases.

Read our guidance and carry out a self-assessment

Carry out a thorough review of your business practices, following our guidance and the points raised in our letter.

For more information on competition law, and to understand how competition law protects both your business and your customers, see our guidance on how to comply with competition law advice for small businesses.

Respond on time

We recommend that you reply to our letter by the deadline given. Remember, the next steps we take are likely to depend in part on your response.

If you’ve received a warning letter, we recommend that you explain what steps you’re taking to ensure that your business is compliant with competition law.

If, after looking at your business practices in detail, you consider that you aren’t breaking the law, please let us know.

Confess and apply for leniency (if this applies in your case)

If you know you have been involved in cartel activity such as price-fixing, bid-rigging or market-sharing arrangements, the CMA cartel leniency policy could protect you from significant penalties.

How to confess and apply for leniency

Reporting other businesses for anti-competitive behaviour

If you suspect that a colleague, competitor, supplier, customer or any other business is involved in a cartel or otherwise breaking competition law you can:

To report any other anti-competitive behaviour, download and complete the CMA notification form and email it to general.enquiries@cma.gov.uk.

You may get a financial reward for information that leads to an investigation.

Read more about how the CMA handles information and complaints about businesses. </div>

The CMA - and the European Commission - have produced guidance on competition law:

Published 14 January 2016
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