Powers of Investigation: Understanding Competition Law

Powers of investigation
Understanding competition law
Competition
law 2004
Since 1 May 2004 not only the European Commission, but also the Office of Fair Trading
(OFT) has the power to apply and enforce Articles 81 and 82 of the EC Treaty in the
United Kingdom. The OFT also has the power to apply and enforce the Competition Act
1998. In relation to the regulated sectors the same provisions are applied and enforced,
concurrently with the OFT, by the regulators for communications matters, gas, electricity,
water and sewerage, railway and air traffic services (under section 54 and schedule 10 of
the Competition Act 1998) (the Regulators). Throughout the guidelines, references to the
OFT should be taken to include the Regulators in relation to their respective industries,
unless otherwise specified.
The following are the Regulators:
• the Office of Communications (OFCOM)
• the Gas and Electricity Markets Authority (OFGEM)
• the Northern Ireland Authority for Energy Regulation (OFREG NI)
• the Director General of Water Services (OFWAT)
• the Office of Rail Regulation (ORR), and
• the Civil Aviation Authority (CAA).
Section 52 of the Competition Act 1998 obliges the OFT to prepare and publish general
advice and information about the application and enforcement by the OFT of Articles 81
and 82 of the EC Treaty and the Chapter I and Chapter II prohibitions contained in the
Competition Act 1998. This guideline is intended to explain these provisions to those
who are likely to be affected by them and to indicate how the OFT expects them to
operate. Further information on how the OFT has applied and enforced competition law in
particular cases may be found in the OFT's decisions, as available on its website from
time to time.
This guideline is not a substitute for the EC Treaty nor for regulations made under
it. Neither is it a substitute for European Commission notices and guidelines.
Furthermore, this guideline is not a substitute for the Competition Act 1998 or the
Enterprise Act 2002 and the regulations and orders made under those Acts. It
should be read in conjunction with these legal instruments, Community case law
and United Kingdom case law. Anyone in doubt about how they may be affected
by the EC Treaty, the Competition Act 1998 or the Enterprise Act 2002 should seek
legal advice.
In addition to its obligations under Community law, when dealing with questions in
relation to competition within the United Kingdom arising under Part I of the Competition
Act 1998, the OFT will act in accordance with section 60 of that Act.
December 2004
Contents
Part Page
1 Introduction 2
2 Trigger for the use of the powers of investigation 4
3 Production of specified documents and information 6
4 Power to enter business premises without a warrant 9
5 Power to enter and search any premises with a warrant 13
6 Limitations on the use of the powers of investigation 19

under Part I of the Act
7 Offences relating to the powers of investigation under 23

Part I of the Act
8 Powers of investigation in relation to exclusions 26
9 Power to assist the European Commission in its investigations 28
10 Power to assist National Competition Authorities of 32

EC Member States
C O M P E T I T I O N L AW G U I D E L I N E 1
1 Introduction
1.1 The Competition Act 1998 (the Act) provides the Office of Fair Trading
(the OFT) with various powers to investigate suspected anti-
competitive behaviour. This guideline describes these powers of
investigation.
1
The Treaty 1.2 First, Part I of the Act provides the OFT with powers to investigate on
establishing the its own behalf suspected infringements of both Article 81 and Article
European Community.
82 of the EC Treaty1 (‘Article 81’ and ‘Article 82’ respectively) and the
2
Section 26.
Chapter I and Chapter II prohibitions contained within Part I of the Act
3
Section 27.
(‘the Chapter I prohibition’ and ‘the Chapter II prohibition’
4
Sections 28 and 28A.
respectively). These powers enable the OFT to:
• require the production of specified documents or specified
information2
• enter business premises without a warrant3, and
• enter and search business and/or domestic premises with a
warrant.4
1.3 Parts 3 to 5 of this guideline describe when each of these powers

can be used, the extent of each power and the procedures that must
be followed. The limitations on the use of these powers are
described in Part 6 of this guideline and the offences committed by a
person who fails to comply when these powers are exercised are
described in Part 7. The OFT’s power to require information when
determining whether to withdraw the benefit of an exclusion is
described in Part 8.
1.4 Second, Part 2 of the Act makes provision for the OFT to assist, or
act on behalf of, the European Commission in connection with
European Commission investigations relating to Article 81 and Article
82. The scope of these powers is described in Part 9.
1.5 Third, Part 2A of the Act provides that the OFT can carry out an
inspection in the United Kingdom, at the request of a national
competition authority (NCA) of another Member State on behalf of
that NCA, for the purpose of assisting it in deciding whether there
has been an infringement of Article 81 or Article 82. When the OFT
conducts such investigations it will use similar powers to those it has
2 C O M P E T I T I O N L AW G U I D E L I N E
December 2004
available to investigate suspected infringements of Article 81 and

Article 82 on its own behalf. The OFT’s role in such investigations is
described in Part 10 of this guideline.
1.6 The Regulators have concurrent powers to investigate suspected

infringements of Article 81 and Article 82 and the Chapter I
prohibition and Chapter II prohibition under Part I of the Act. The
Regulators do not have investigative powers under Part 2 or Part 2A
of the Act and therefore do not have any powers to investigate
suspected infringements of Article 81 or Article 82 in connection with
an investigation by the European Commission or on behalf of NCAs of
other Member States. However, where appropriate, Regulators may
participate in investigations conducted by the OFT under Part 2 or
Part 2A of the Act.
2 Trigger for the use of the

powers of investigation
2.1 Section 25 of the Act provides that the OFT, when acting on its own
behalf, may carry out an investigation if there are reasonable grounds
for suspecting:
5
References in this • that an agreement5 falls within Article 81 and/or the Chapter I
guideline to prohibition, and/or
agreements should,
unless otherwise stated
or the context demands
• that there has been an infringement of Article 82 and/or the
it, be taken to include Chapter II prohibition.
decisions by
associations of
undertakings and The formal powers of investigation can only be used where this
concerted practices. requirement is met. Thus the OFT is not obliged to determine
6
Further details of the whether the conditions in Article 81(3) of the EC Treaty (in the case of
conditions in Article
81(3) of the EC Treaty
an agreement which is suspected to fall within Article 81) or section
and section 9(1) of the 9(1) of the Act (in the case of an agreement which is suspected to fall
Act are set out in the
competition law
within the Chapter I prohibition) may be satisfied before it may
guideline Agreements conduct an investigation.6
and concerted practices
(OFT401).
2.2 Whether there are reasonable grounds for suspicion will depend upon
the OFT’s assessment of the information available. Examples of
information that may be a source of reasonable grounds for suspicion
include information provided by disaffected members of a cartel,
statements from employees or ex-employees, or a complaint.
7
For a discussion of 2.3 However, in the case of an agreement which is suspected to fall
EC and domestic block within the Chapter I prohibition, if the OFT considers that the
exemptions and parallel
exemptions under the agreement has the benefit of a parallel exemption or a domestic block
Act and the exemption, then it cannot investigate unless it has reasonable
circumstances in which
they may be cancelled grounds for suspecting that the circumstances are such that it could
or withdrawn (as the exercise its power to cancel the exemption. Similarly, in the case of
case may be), see the
competition law an agreement which is suspected to fall within Article 81, if the OFT
guideline Agreements considers that the agreement has the benefit of a Commission block
and concerted practices
(OFT401).
exemption regulation, then it cannot investigate unless it has
reasonable grounds for suspecting that the conditions for the
withdrawal of the benefit of the regulation in question may be
satisfied.7
December 2004
2.4 Parts 3 to 5 of this guideline describe the OFT’s formal powers of 8

The term
investigation. It should be noted that the OFT may also obtain undertaking is not
defined in the EC Treaty
information about undertakings8, agreements, practices and markets or the Act, but its
through informal enquiries. Such enquiries, which may be made at a meaning has been set
out in Community law.
meeting, in written correspondence or in a telephone conversation, It covers any natural or
may be made in addition to, or instead of, using the formal powers of legal person engaged in
economic activity,
investigation set out in the Act. The OFT cannot compel an regardless of its legal
undertaking to respond to an informal enquiry which is not backed by status and the way in
which it is financed. It
statutory powers. Undertakings are encouraged to cooperate. includes companies,
partnerships, firms,
businesses, individuals
operating as sole
traders, agricultural
cooperatives,
associations of
undertakings (e.g. trade
associations), non-profit
making organisations
and (in some
circumstances) public
entities that offer goods
or services on a given
market.
3 Production of specified
documents and
information
When the power can be used
3.1 Where the OFT has reasonable grounds for suspecting that an
agreement falls within one or both of Article 81 and the Chapter I
prohibition, and/or that one or both of Article 82 and the Chapter II
prohibition have been infringed, it may require, under section 26 of
the Act, a person to produce specified documents or to provide
specified information. This is the power of investigation that the OFT
uses most frequently. The section 26 power is exercised by written
notice, the contents of which are described in paragraph 3.8 below.
3.2 It is not necessary for the section 26 power to be used before

carrying out an inspection (described in Parts 4 and 5 below). For
example, it may be used for the first time either during or after an
inspection to clarify facts that have emerged.
3.3 A person may receive a notice requiring the production of documents

or information on more than one occasion during the course of an
investigation. For example, the OFT may require a person to produce
further information after considering the material produced in
response to an earlier notice under section 26.
The scope of the power
3.4 The OFT can require any person to produce documents or information
that it considers relate to any matter relevant to the investigation. The
OFT is not limited to approaching the undertakings suspected of
infringement. For example, the notice may be addressed to third
parties such as complainants, suppliers, customers and competitors.
3.5 The OFT can also:

• take copies or extracts from any document produced
December 2004
• require the person required to produce the document (or any past
or present officer or employee of that person) to provide an
explanation of the document if it is produced
• require the person required to produce the document to state, to
the best of their knowledge or belief, where the document can be
found, if the document is not produced.
3.6 The term ‘document’ includes ‘information recorded in any form’9. 9

Section 59 of the
This definition includes records, such as invoices or sales figures, held Act.
on computer. ‘Specified’ means documents or information that are

specified or described in a written notice or that fall within a category
which is so specified or described. A category of documents may
include, for example, invoices, agreements and minutes of meetings.
3.7 The OFT can use the power to require the production of specified
information to require the compilation and production of information
that is not already in recorded form. For example, a person may be
asked to provide market share information or to provide a description
of a particular market using their knowledge and experience or the
knowledge and experience of their staff.
The procedure
3.8 The power to require the production of documents or information

using section 26 of the Act is exercised by serving a written notice.
The written notice will usually be sent by post or by fax. The written
notice must:
• state the subject matter and purpose of the investigation
• specify or describe the documents or information, or categories of
documents or information, required, and
• set out the nature of the offences that may be committed if a
person fails to comply when the powers of investigation are
exercised (described in Part 7 of this guideline).
3.9 The notice may also state the time and place at which a document or
information must be produced and the manner and form in which it is
to be produced. For example, a person may be required to produce
the documents or information at a specified address on a designated

date at a particular time. If a document is produced, the OFT may
require that an explanation of the document is provided. A person
required by the OFT to provide an explanation of a document may be
accompanied by a legal adviser.
3.10 In specifying documents or information in a written notice, the OFT

will not seek more documents or information than it believes are
necessary for the investigation as at the date of the notice.
3.11 When setting the appropriate time limit for the production of
documents or information, the OFT will consider the amount and the
complexity of the information required, the resources available to the
individual or undertaking and the urgency of the case.
3.12 The notice may be addressed to individuals or undertakings. Where a

notice is addressed to an undertaking, the appropriate person to
respond is the person who is authorised by the undertaking to
respond on behalf of the undertaking. Where a notice is addressed to
an individual, that individual must respond, and it is not acceptable for
another person to respond on their behalf. This does not prevent an
individual from obtaining legal representation in relation to a notice.
December 2004
4 Power to enter business

premises without a
warrant
4.1 If the OFT has reasonable grounds for suspecting that an agreement
falls within one or both of Article 81 and the Chapter I prohibition,
and/or that one or both of Article 82 and the Chapter II prohibition
have been infringed, it may conduct an investigation and has the
power to enter premises to carry out inspections, either with or
without a warrant. These powers enable the OFT to enter premises
and to gain access to documents relevant to an investigation.
4.2 The power to carry out inspections without a warrant is described in 10

Section 27(6).
this Part of the guideline. This power is limited to business premises,
which are defined in the Act as meaning any premises (or part of any
premises) not used as a dwelling10. The power to carry out
inspections of both business and domestic premises when a warrant
has been obtained is described in Part 5 of this guideline.
When the power can be used
4.3 Any officer of the OFT who is authorised in writing by the OFT to
enter premises (an authorised officer) may enter business premises in
connection with an investigation if they have given the occupier of
the premises at least two working days’ written notice of the
intended entry. The occupier of the premises need not be suspected
of an infringement. For example, the premises of a supplier or
customer may be entered using this power.
4.4 An authorised officer may enter business premises in connection with

an investigation without a warrant and without notice if:
• the OFT has a reasonable suspicion that the premises are, or have
been, occupied by a party to an agreement which it is investigating
or an undertaking whose conduct it is investigating, or
• the authorised officer has been unable to give notice to the
occupier, despite taking all reasonably practicable steps to give
notice.
4.5 An authorised officer entering business premises without a warrant

may require:
• any person on the premises to produce any document that the
authorised officer considers relates to any matter relevant to the
investigation. For example, an employee may be asked to produce
minutes of any meetings with competitors, the diaries of specified
directors, sales data or invoices. The authorised officer can take
copies of, or extracts from, any document produced
• any person on the premises to provide an explanation of any
document produced. For example, an employee may be requested
to provide an explanation of the entries or codes on an invoice or
spreadsheet
• any person to state, to the best of their knowledge and belief,
where any document that the authorised officer considers relates
to any matter relevant to the investigation can be found
• any information, which is stored in any electronic form and is
accessible from the premises, and which the officer considers
relates to any matter relevant to the investigation, to be produced
in a form in which it can be read and can be taken away.
He may also take any other steps necessary in order to preserve the
documents or prevent interference with them. This includes requiring
that the premises (or any part of the premises, including offices, files
and cupboards) be sealed for such time as is reasonably necessary to
enable the inspection to be completed. This time period will not be
for longer than 72 hours, except where an undertaking consents to a
longer time or where access to documents is unduly delayed, such as
by the unavailability of a person who can provide access.
4.6 An authorised officer may take with him any equipment that he
deems necessary when entering any premises under this power. For
example, the authorised officer may take portable computer
equipment and tape recording equipment.
December 2004
The procedure
4.7 If the authorised officer is carrying out an inspection of business

premises without a warrant after giving at least two working days’
written notice, the written notice must state:
• the subject matter and purpose of the investigation, and
• the nature of the offences that may be committed if a person fails
to comply when the powers of investigation are exercised
(described in Part 7 below).
4.8 If the authorised officer is entering the premises without a warrant

and without written notice, he may enter only on production of
evidence of his authorisation by the OFT and a document indicating:
4.9 The authorised officer will normally arrive at the premises during
office hours. On entering the premises, the authorised officer will
produce evidence of his identity. He will also hand over a separate
document which sets out the powers of the authorised officer and
states that the occupier may request that a legal adviser is present.
Where possible, the person in charge at the premises should
designate an appropriate person to be a point of contact for the
authorised officer during the inspection. It is the OFT’s practice that at
the end of the inspection, the authorised officer will provide where
practicable a list of documents and extracts from documents of which
copies have been taken.
Access to legal advice
4.10 An undertaking being inspected will be able to contact its legal

advisers during the course of an inspection. The authorised officer will
grant a request to wait a reasonable time for legal advisers to arrive at
the premises before the inspection continues, if he considers that it is
appropriate to do so in the circumstances.
4.11 The exercise of the right to consult a legal adviser must not unduly
delay or impede the inspection. Any delay must be kept to a strict
minimum. The main concern is that any delay might provide an
opportunity for evidence to be tampered with or for other parties to a
suspected infringement to be warned about the inspection, for
example, by telephone or email. To reduce this concern, the
authorised officer may attach such conditions as he considers
appropriate when agreeing a reasonable time to wait. The conditions
could include, for example, the sealing of cabinets, keeping business
records in the same state and place as when the authorised officer
arrived, suspending external e-mail and allowing the authorised officer
to enter and remain in occupation of selected offices. If an
undertaking has an in-house legal adviser on the premises, or if the
undertaking has been given notice of the inspection, the authorised
officer will not wait for an external legal adviser to arrive.
December 2004
5 Power to enter and

search any premises with
a warrant
5.1 An application can be made to a judge of the High Court (or the Court 11
See Civil Procedure
of Session in Scotland) for a warrant11 for a named officer of the OFT Rules, Practice
Direction - Application
(named officer) and other authorised officers12 to enter and search for a warrant under the
both business and domestic premises (the latter may not be entered Competition Act 1998
(May 2004).
without a warrant). 12
A named officer is
also an authorised
When the power can be used officer.
5.2 In relation to business premises, the Act identifies three

circumstances in which a judge of the High Court or Court of Session
may issue a warrant to authorise a named officer and any other
authorised officers to enter and search business premises specified in
the warrant. The judge must be satisfied that there are reasonable
grounds for suspecting that there are documents on the premises to
be searched:
• which the OFT has required to be produced, either by written
notice (section 26 of the Act) or in the course of an inspection
without a warrant (section 27 of the Act), and which have not been
produced
• which the OFT has the power to require to be produced by written
notice (section 26 of the Act), but which, if required to be
produced, would be concealed, removed, tampered with or
destroyed, or
• which an authorised officer could have required to be produced in
an inspection without a warrant (section 27 of the Act). In these
circumstances the judge must also be satisfied that an authorised
officer has attempted but has been unable to enter the business
premises without a warrant.
5.3 The second ground for obtaining a warrant identified above (that
documents would be concealed or removed etc. if required to be
produced) is the only means by which the OFT is able to carry out an
inspection of business premises with a warrant without using one of

the other investigatory powers first.
13
Section 28A(9). 5.4 Domestic premises are defined in the Act as premises (or any part of
premises) used as a dwelling, and also used in connection with the
affairs of an undertaking or association of undertakings, or where
documents relating to the affairs of an undertaking or association of
undertakings are kept.13 In relation to domestic premises, the Act
identifies two circumstances in which a judge of the High Court or
Court of Session may issue a warrant to authorise a named officer
and any other authorised officers to enter and search domestic
premises specified in the warrant. The judge must be satisfied that
there are reasonable grounds for suspecting that on any domestic
premises to be searched there are documents:
• which the OFT has required to be produced by written notice
(section 26 of the Act) and which have not been produced, or
• which the OFT has the power to require to be produced by written
notice under section 26 of the Act; and if the documents were
required to be produced, they would not be produced but would be
concealed, removed, tampered with or destroyed.
5.5 The warrant will authorise a named officer, and any other authorised
officers to:
• Enter the premises specified in the warrant using such force as
reasonably necessary. Authorised officers entering the premises
will be entitled to use force only if they are prevented from
entering the premises and may use only such force as is
reasonably necessary for the purpose of gaining entry. Authorised
officers cannot use force against any person.
• Search the premises and take copies of any documents or extracts
from documents appearing to be of the kind in respect of which
the warrant was granted (identified in paragraph 5.9 below).
Authorised officers can search offices, desks and filing cabinets
etc. to find such documents. It is the OFT’s practice that, at the
end of the inspection, the authorised officer will, where practicable,
December 2004
provide a list of documents and extracts from documents of which

copies have been taken.
• Take possession of any documents appearing to be of the kind in
respect of which the warrant was granted if such action appears to
be necessary for preserving the documents or preventing
interference with them, or if it is not reasonably practicable to take
copies of the documents on the premises. Unless it is
impracticable in all the circumstances, no item will be removed
from the premises until the authorised officers have prepared a list
of the items to be removed from the premises, a copy of the list
has been supplied to the occupier (or the occupier’s representative)
and a reasonable opportunity has been allowed to check that the
list contains all items concerned and only those items. Original
documents that are taken will be returned within three months.
• Take any other steps which appear necessary in order to preserve
the documents or prevent interference with them. This includes
requiring that the premises (or any part of the premises, including
offices, files and cupboards) be sealed for such time as is
reasonably necessary to enable the inspection to be completed.
This time period will not be for longer than 72 hours, except where
an undertaking consents to a longer time or where access to
documents is unduly delayed, such as by the unavailability of a
person who can provide access.
• Require any person to provide an explanation of any document
appearing to be of the kind in respect of which the warrant was
granted or to state to the best of their knowledge and belief where
such document may be found.
• Require any information, which is stored in any electronic form and
is accessible from the premises, and which the officer considers
relates to any matter relevant to the investigation, to be produced
in a form in which it can be read and can be taken away.
5.6 In respect of business premises, the officers’ powers to take copies

of, and take possession of, documents will include the powers to:
• Take copies, or take possession, of any document in order to
determine later whether (or the extent to which) the document is
14
Section 50(1) of a kind in respect of which the warrant was granted, where in all
Criminal Justice and the circumstances it is not reasonably practicable to determine this
Police Act 2001.
on the premises.14
15
Section 50(2) • Take copies, or take possession of, any document comprised in
Criminal Justice and something else where in all the circumstances it is not reasonably
Police Act 2001.
practicable on the premises to separate the document which is of
a kind in respect of which the warrant was granted from a
document or information which is not, but in which it is
comprised.15
5.7 Authorised officers entering premises under a warrant may take with
them such equipment as they deem necessary. This will include
equipment that can be used to enter the premises using reasonable
force (for example, equipment that can be used to break locks) as
well as equipment that can be used to facilitate the search (for
example, computer equipment).
5.8 The warrant may also authorise other persons to accompany the
authorised officers on the inspection, such as computer technicians
or industry experts who may carry out specific tasks under
supervision of authorised officers.
5.9 The category of documents that authorised officers can take copies of
etc. (as set out in paragraph 5.5 above) depends on the ground under
which the warrant was obtained:
• Where the warrant was granted because a person failed to
produce documents, the authorised officers can take copies etc. of
any documents which were required to be produced and were not
produced under section 26 or 27 of the Act.
• Where the warrant was granted because there were reasonable
grounds for suspecting that documents would have been tampered
with etc., the authorised officers can take copies etc. of any such
documents. In addition, if the judge is satisfied that it is reasonable
to suspect that there are also other documents relating to the
investigation on the premises, the warrant will authorise the
authorised officers to take copies etc. of any such document.
December 2004
• Where the warrant was granted because an authorised officer was

unable to enter business premises, the authorised officers can take
copies etc. of any document which could have been required to be
produced under section 27 of the Act had they been able to enter
the premises.
The procedure
5.10 The powers set out in paragraphs 5.5 to 5.9 may only be exercised on
production of the warrant.
5.11 The warrant must indicate:

The warrant continues in force for one month from the date of issue.
5.12 The authorised officers will normally arrive at the premises during
office hours. On entering the premises, the named officer will
produce evidence of their identity. The named officer will also hand
over a document which sets out the powers of the authorised
officers and states that the occupier may request that a legal adviser
be present. Where possible, the person in charge at the premises
should designate an appropriate person to be a point of contact for
the authorised officers during the inspection.
5.13 If there is no one at the premises, the named officer must take
reasonable steps to inform the occupier of the premises of the
intended entry. If the occupier is informed, the occupier or their legal
or other representative must be given a reasonable opportunity to be
present when the warrant is executed. If the named officer has been
unable to inform the occupier of the intended entry, he is under a
duty to leave a copy of the warrant in a prominent place on the

premises. On leaving premises that are unoccupied the named officer
must leave them secured as effectively as he found them.
Access to legal advice
5.14 See paragraphs 4.10 to 4.11 above.
December 2004
6 Limitations on the use of

the powers of
investigation under Part I
of the Act
Privileged communications
6.1 The power to require the production of documents under Part I of the
Act, either on written notice or during an inspection, does not extend
to privileged communications. A privileged communication is defined
by section 30 of the Act to mean a communication:
• between a professional legal adviser and his or her client, or
• made in connection with, or in contemplation of, legal proceedings
and for the purposes of those proceedings
which would be protected from disclosure in proceedings in the High

Court on grounds of legal professional privilege or in the Court of
Session on grounds of confidentiality of communications.
6.2 When the OFT is investigating suspected infringements of Article 81 16

Case 155/79 AM & S
or Article 82 in the UK on its own initiative (or at the request of Europe v Commission
[1982] ECR 1575,
another NCA or on behalf of the European Commission - see [1982] CMLR 264.
paragraphs 10.5 and 9.9, respectively), UK rules on legal professional
privilege (‘privilege’) will apply. This means that the communications
of in-house lawyers, in addition to lawyers in private practice, can
benefit from privilege. This is a different rule to that applied by the
European Commission, which does not allow the communications of
in-house lawyers to benefit from privilege.16
6.3 Whilst UK privilege rules would apply to cases being investigated in

the UK by the OFT on its own behalf, the OFT could be sent the
communications of in-house lawyers, or lawyers qualified outside the
EU, by an NCA from another Member State where the
communication of such lawyers are not privileged. Under those
circumstances, the OFT may use the documentation received from
the other NCA in its investigation.
6.4 The European Commission’s privilege rules (which do not extend to

in-house counsel) will continue to apply to investigations that it
conducts on its own behalf (see further paragraphs 9.7 to 9.9 below).
Self-incrimination
17
This is given effect 6.5 Privilege against self-incrimination is an aspect of the right to a fair
in the United Kingdom trial guaranteed by Article 6 of the European Convention on Human
by the Human Rights
Act 1998. Rights17. A privilege against self-incrimination has also been
18
See paragraphs 77- recognised in EC jurisprudence in relation to investigation of
78 of the judgment in suspected breaches of Article 81 and Article 8218. In the context of
Case T-112/98
Mannesmannröhren- investigations under the Act, the privilege recognised in EC
Werke AG v jurisprudence is consistent with the requirements of the European
Commission [2001]
ECR II-729.
Convention on Human Rights19.
19
See Office of Fair
Trading v X [2003] 6.6 The OFT may compel an undertaking to provide specified documents
EWHC 1042 (Comm), or specified information but cannot compel the provision of answers
[2003] 2 All ER (Comm)
183. which might involve an admission on its part of the existence of a
competition law infringement, which it is incumbent upon the OFT to
prove. The OFT may, however, request documents or information
relating to facts: for example, whether a particular employee attended
a particular meeting.
20
Section30A. The 6.7 A statement made by a person in response to a requirement imposed
same general principle by the OFT when investigating suspected competition law
applies also to
requirements imposed infringements may not generally be used in evidence against that
by the OFT when person on a prosecution for the cartel offence under the Enterprise
investigating under Part
2 or Part 2A of the Act: Act 2002 (the Enterprise Act)20.
see sections 65B and
65K. Disclosure of information
6.8 Part 9 of the Enterprise Act imposes limits on the disclosure of

information relating to the affairs of any individual or to any particular
business of an undertaking, that is obtained in connection with the
exercise of any function of the OFT under the Act (including the
OFT’s powers of investigation under the Act).
December 2004
6.9 The Enterprise Act requires that such information is not to be

disclosed during the lifetime of the individual in question or while the
undertaking continues in existence unless disclosure is specifically
permitted under Part 9 or is made pursuant to a power or duty to
disclose information which exists apart from Part 9.
6.10 Part 9 of the Enterprise Act provides a number of categories of 21

Sections 239 to 243
permitted disclosure21. For example, the OFT is permitted to disclose Enterprise Act.
information for the purpose of facilitating any of its functions 22

Section 241(1)
Enterprise Act.
(including its functions under the Act and the Enterprise Act)22. 23
Section 239
Disclosure is also allowed with the consent either of the individual to Enterprise Act.
whose affairs the information relates or, where the information relates
to the business of an undertaking, the consent of the person carrying
on the business. In either case, where the information was obtained
by the OFT from a different person (who had the information lawfully
and whose identity is known to the OFT), then the consent of that
person will also be required23.
6.11 Before making a permitted disclosure (for example, where such 24

Section 244(2)
information is included in material to be published), the OFT must Enterprise Act.
have regard to three considerations:

25
Section 244(3)
Enterprise Act.
• the need to exclude, so far as is practicable, information the 26
Section 244(4)
disclosure of which would in its opinion be contrary to the public Enterprise Act.
interest24
• the need to exclude, so far as is practicable, commercial
information disclosure of which it thinks might significantly harm
the legitimate business interests of the undertaking to which it
relates, or information relating to the private affairs of an individual
disclosure of which it thinks might significantly harm the
individual’s interests25, and
• the extent to which the disclosure of commercial information is
necessary for the purposes for which it is to be disclosed26.
The OFT may have to edit documents it proposes to disclose to

remove information: for example, by blanking out parts of documents
or by aggregating figures.
27
The Competition Act 6.12 Where, under the OFT’s Rules, the OFT proposes to disclose any
1998 (Office of Fair
Trading’s Rules) Order
information identified by the person supplying it as being confidential
2004 (SI 2004/2751), information, the OFT will inform the person supplying the information
Rule 6(1).
of its proposed action, and give that person a reasonable opportunity
to make representations to the OFT 27.
28
Article 12 of Council 6.13 For disclosure of information to the Commission and NCAs, the OFT
Regulation (EC) No has a power to disclose, apart from Part 9 of the Enterprise Act,
1/2003 of 16 December
2002 on the provided by the Modernisation Regulation 28. This allows disclosure to
implementation of the the Commission and NCAs for the purpose of applying Articles 81
rules on competition
laid down in Articles 81 and 82. Where information relates to the affairs of any individual or to
and 82 of the Treaty any business of an undertaking, the OFT will have regard to the three
(OJ L1, 4.1.03, p1). See
the competition law considerations outlined at paragraph 6.11 above before making such
guideline Modernisation disclosure to the Commission or an NCA. However, such disclosure is
(OFT442) for further
details.
not made under the OFT’s Rules, and accordingly the procedure
29
Section 240
outlined in paragraph 6.12 above does not apply. Part 9 of the
Enterprise Act. Such Enterprise Act also specifically permits disclosure of information
an obligation may arise where disclosure is required for the purpose of a Community
from Article 11 or
Article 18(6) of the obligation29.
Modernisation
Regulation.
December 2004
7 Offences relating to the

powers of investigation
under Part I of the Act
7.1 The Act sets out a number of criminal offences which may be
committed where a person fails to co-operate when the powers of
investigation set out in Part I of the Act are exercised. It is an offence
for a person to:
• fail to comply with a requirement imposed under the powers of
investigation in the Act (subject to certain defences, see below)
• intentionally obstruct an authorised officer carrying out an
inspection either with or without a warrant
• intentionally or recklessly destroy or otherwise dispose of or falsify
or conceal a document that they have been required to produce or
cause or permit its destruction, disposal, falsification or
concealment, or
• provide information that is false or misleading in a material
particular if they know, or are reckless as to whether, it is false or
misleading, either to the OFT or to another person such as an
employee or legal adviser, knowing that it will be used for the
purpose of providing information to the OFT.
7.2 A person who fails to comply with a requirement to produce a

document has a defence if they can prove that the document was not
in their possession or control and that it was not reasonably
practicable to comply with this requirement. It is a defence for a
person who fails to comply with a requirement to provide information
or an explanation of a document or to state where a document is to
be found if they can prove that they had a reasonable excuse for
failing to comply with the requirement.
7.3 Failing to comply with a requirement imposed under section 26 or

section 27 of the Act is not an offence if the OFT has failed to act in
accordance with the provision in question.
7.4 The officer as well as the body corporate is guilty of any of the
offences described above if the offence that is committed by a body
corporate is proved to have been committed with the consent or
connivance of an officer or to be attributable to their neglect. An
‘officer’ is defined to mean a director, manager, secretary or other
similar officer of the company or a person purporting to act in any
such capacity. Where the affairs of the body corporate are managed
by its members, a member is also guilty of an offence if the offence
of the body corporate is proved to have been committed with the
consent or connivance of the member or to be attributable to their
neglect as if they were a director. In Scotland, a partner or person
purporting to be a partner, as well as the partnership, may be guilty of
the offence.
7.5 Offences will be tried either summarily in the Magistrates’ Court or

Sheriff Court or, in the case of more serious offences, on indictment
in the Crown Court or the High Court of the Justiciary. The Code for
Crown Prosecutors will be followed in determining the appropriate
court in which to commence proceedings.
7.6 A person convicted of intentionally obstructing an authorised officer

carrying out an inspection without a warrant will be liable to a fine.
The consequences of intentionally obstructing an authorised officer
exercising their powers under a warrant are more serious. Conviction
on indictment may lead to a fine, to imprisonment for up to two
years, or both.
7.7 The sanctions that may be imposed by the courts on a person found
guilty of each offence described in paragraph 7.1 are set out in the
table following. The sanctions that are available for each offence differ
according to whether the person is found guilty on summary
conviction or on indictment.
December 2004
Sanction on Sanction on
summary conviction on
Offence conviction indictment
Fail to comply with a Fine of up to the Unlimited fine

requirement imposed under statutory maximum
the powers of investigation (currently £5000)
Intentionally obstruct an Fine of up to the Unlimited fine

authorised officer carrying statutory maximum
out an inspection without
a warrant
Intentionally obstruct an Fine of up to the Unlimited fine and/or

authorised officer carrying statutory maximum up to two years’
out an inspection with imprisonment
a warrant
Intentionally or recklessly Fine of up to the Unlimited fine and/or

destroy, dispose of, falsify statutory maximum up to two years’
or conceal a document the imprisonment
production of which has
been required or cause or
permit its destruction etc.
Knowingly or recklessly Fine of up to the Unlimited fine and/or

provide information that is statutory maximum up to two years’
false or misleading in a imprisonment
material particular
8 Powers of investigation
in relation to exclusions
30
Section 3 and 8.1 The Act specifically excludes certain categories of agreements and/or
Schedules 1-4. The Act conduct from the Chapter I prohibition or the Chapter II prohibition30
does not provide for
exclusions from Article (see competition law guidelines Agreements and concerted practices
81 or Article 82. (OFT401) and Abuse of a dominant position (OFT402)). In relation to
31
Schedule 1. some of these categories, the OFT is able to withdraw the application
32
Schedule 3. of the exclusion in certain circumstances. Those categories are:
However, the exclusion
is repealed with effect • certain agreements falling within the mergers exclusion31
from 1 May 2007: see
the competition law • agreements which are the subject of a direction under section
guideline Modernisation
(OFT442). 21(2) of the Restrictive Trade Practices Act 197632
33
Schedule 3.
• agreements which relate to production of or trade in ‘agricultural
34
The exclusion for products’ as defined in the EC Treaty and in Council Regulation
vertical agreements is
repealed with effect (EEC) No 26/62, or to certain farmers’ cooperatives33, and
from 1 May 2005: see
the competition law • certain vertical agreements and land agreements which fall within
guideline Vertical
the relevant order made pursuant to section 50 of the Act34.
agreements (OFT419).
See the competition
law guideline Land 8.2 The OFT may issue a direction to withdraw the application of an
agreements (OFT420)
for further detail in exclusion from a particular agreement falling within one of the above
relation to land categories if it considers that the agreement would fall within the
agreements.
Chapter I prohibition and that it would be unlikely to satisfy the
conditions in section 9(1) of the Act.
35
Ten working days 8.3 If the OFT is considering withdrawing an exclusion, it may require any
starting with the date party to the agreement in question to give it such information in
notice is given. See
Rule 14(3). connection with the agreement as it requires. This must be done by
sending a written notice. If the party in question fails to provide the
information required within the time period specified in the OFT’s
Rules35 without reasonable excuse, the OFT may give a direction
withdrawing the exclusion.
December 2004
8.4 Section 194A of the Broadcasting Act 1990 allows the OFT and
OFCOM (but not the other Regulators) to exercise the powers of
investigation in the Act in respect of certain agreements relating to
television news provision. A special procedure must, however, be
observed before the powers can be exercised.
8.5 Section 160 of the Financial Services and Markets Act 2000 allows
the OFT (but not the Regulators) to exercise powers to request
information in respect of its competition scrutiny of the regulating
provisions and practices of the Financial Services Authority. Section
305 of the Financial Services and Markets Act 2000 allows the OFT
(but not the Regulators) to exercise powers to request information in
respect of its competition scrutiny of recognised investment
exchanges and clearing houses.
9 Power to assist the

European Commission in
its investigations
9.1 The European Commission has formal powers enabling it to
undertake investigations relating to Article 81 and Article 82. Part 2 of
the Act and the Modernisation Regulation together provide the OFT
with powers to assist the European Commission. The OFT may
actively participate in European Commission investigations relating to
Article 81 or Article 82 in three ways:
• the OFT may be required to assist the European Commission
when European Commission officials carry out an inspection of
business premises in the United Kingdom
• the European Commission may request that the OFT carry out an
inspection of business premises on its behalf, and/or
• the OFT may be required to assist the European Commission
when European Commission officials carry out an inspection of
non-business premises in the United Kingdom.
9.2 These powers are not available to the Regulators; however, they may
participate in inspections carried out by the OFT on behalf of the
European Commission if the industry being investigated falls within
their area of expertise.
36
Article 20(5) of the 9.3 When assisting the European Commission with an inspection of
Modernisation business premises, the officers of the OFT have the same powers as
Regulation.
an official authorised by the European Commission36. The OFT may
obtain a warrant where a European Commission inspection is being,
or is likely to be, obstructed. The warrant will authorise officers of the
OFT and European Commission officials to enter the premises in
question and to search for books and records and the sealing of the
premises or part of the premises for the period and to the extent
necessary for the inspection.
December 2004
9.4 When the OFT is carrying out an inspection of business premises on 37

Section 62B(1).
behalf of the European Commission, the officers of the OFT will have 38
Article 20(2)(e) of the
been given an authorisation under the Act which has the effect of Modernisation
Regulation.
providing them with the powers of an official authorised by the
39
Article 23(1)(c) (fines)
European Commission37. This means that the officers will possess and Article 24(1)(e)
further powers that are not available when the OFT investigates (periodic penalty
payments) of the
suspected infringements of Article 81 or Article 82 on its own behalf. Modernisation
Primarily, the officers will not only be able to ask employees of the Regulation.
undertaking under inspection for explanations of documents but also 40
Section 63.
of facts relating to the subject matter and purpose of the
inspection38. The authorisation will identify the officers, the subject
matter and purpose of the investigation and draw attention to the
penalties which an undertaking may incur in connection with the
inspection under the relevant provision of Community law39. The OFT
may obtain a warrant where an inspection of business premises
which it is carrying out on behalf of the European Commission is
being, or is likely to be, obstructed40. The warrant will authorise
officers of the OFT, and any accompanying European Commission
officials, to enter the premises in question and to search for books
and records that the OFT officers have the power to examine, using
such force as is reasonably necessary for those purposes. The
warrant will also authorise taking copies of the books and records and
the sealing of the premises or part of the premises for the period and
to the extent necessary for the inspection.
9.5 When assisting the European Commission with an inspection of non- 41

Article 21(4) of the
business premises, the OFT must obtain a warrant before any Modernisation
Regulation.
inspection can be carried out. The warrant will authorise officers of
the OFT and officials of the European Commission to enter the non-
business premises. It may also authorise them to search for books
and records that the officials have power to examine, and to take
copies of the books and records, and may authorise the use by them
of such force as is reasonably necessary for the purposes of effecting
entry and searching. When assisting the European Commission in this
way, the officers of the OFT, in addition to being able to do anything
which the warrant authorises them to do, have the same powers as
an official authorised by the European Commission41.
9.6 Any warrant obtained by the OFT in connection with an investigation

by the European Commission must indicate the subject matter and
purpose of the investigation and the nature of the offence for
obstruction described in paragraph 9.10. The warrant may also
authorise other persons to accompany the authorised officers on the
inspection, such as computer technicians or industry experts who
may carry out specific tasks under supervision of authorised officers.
42
Case 155/79 AM & S 9.7 The range of documents that can benefit from legal professional
Europe v Commission privilege in inspections conducted to assist the European
[1982] ECR 1575, 1982
[CMLR] 264. Commission is narrower than when the OFT is investigating
suspected infringements of Article 81 or Article 82 on its own behalf
or on behalf of another NCA. The European Court has recognised that
correspondence between a client and an external legal adviser,
entitled to practise in one of the Member States, is subject to legal
professional privilege where: (i) the correspondence follows the
initiation of proceedings by the European Commission and concerns
the defence of the client; or (ii) the correspondence existed before
the initiation of proceedings but is closely linked with the subject-
matter of the proceedings. Correspondence between a client and an
external legal adviser who is not entitled to practise in one of the
Member States or between a client and an in-house legal adviser
(unless the in-house legal adviser is simply reporting the legal advice
of an external legal adviser) is not recognised by the European Court
as being protected by legal professional privilege42.
9.8 Where an inspection is being conducted to assist the European

Commission, legal professional privilege can be claimed only for
documents that fall within the category of correspondence that the
European Court has recognised as being subject to legal professional
privilege. In order to claim legal professional privilege for certain
documents during an inspection the occupier must make a case to
the European Commission demonstrating why the documents are
covered by legal professional privilege.
December 2004
9.9 Where an inspection is being conducted by the OFT on behalf of the 43

Section 65A of the
European Commission (under sections 62B and/or 63 of the Act), the Act.
United Kingdom rules on legal professional privilege will apply43 .
9.10 A person will be guilty of an offence if they intentionally obstruct any

person in the exercise of their powers under a warrant issued in
relation to a European Commission investigation relating to Article 81
or 82. The sanction is a fine of up to the statutory maximum on
summary conviction or an unlimited fine and/or a maximum of two
years’ imprisonment on conviction on indictment.
10 Power to assist National

Competition Authorities
of EC Member States
10.1 The Modernisation Regulation enables the NCAs to investigate
suspected infringements of Article 81 and Article 82 on behalf of each
other.
44
Section 65D. 10.2 Under Part 2A of the Act, the OFT may carry out an inspection or
other fact-finding measure in the United Kingdom on behalf of an
NCA of another Member State in order to assist it in establishing
whether there has been an infringement of Article 81 or 8244.
45
Section 65E. 10.3 Part 2A provides the OFT with similar powers of investigation to
46
Section 65F. those it uses to investigate suspected infringements of Article 81 and
47
Sections 65G and 82 under Part I of the Act. This means that where there are
65H. reasonable grounds for suspecting that an agreement falls within
Article 81 or that the prohibition in Article 82 has been infringed, the
OFT will have the power to:
• require the production of specified documents and information (see
Part 3 above)45
• enter business premises without a warrant (see Part 4 above)46,
and
• enter and search business or domestic premises with a warrant
(see Part 5 above)47.
10.4 These powers of investigation are not available to the Regulators;

however, they may participate in inspections under warrant carried
out by the OFT on behalf of other NCAs where the industry being
investigated falls within their area of expertise. The warrant may
authorise officers of a relevant Regulator to accompany authorised
officers on the inspection, and they may carry out specific tasks under
the supervision of authorised officers.
10.5 These powers of investigation are subject to the same restrictions

concerning legal professional privilege and self-incrimination that are
described in Part 6, in relation to investigations under Part I of the
December 2004
Act. Individuals who fail to comply when these powers of

investigation are exercised risk committing the same offences and
face the same possible sanctions as described in Part 7.
10.6 Although NCAs of other Member States do not have any formal 48
Sections 65G(4) and
powers of investigation within the United Kingdom, officers of other 65H(4).
NCAs may be authorised to accompany the authorised officers of the

OFT on an inspection where the OFT uses its power to enter
premises under a warrant. Such officers may carry out specific tasks
under the supervision of the authorised officers of the OFT 48.
December 2004
Competition law guidelines
The OFT is issuing a series of competition law guidelines. New guidance may
be published and the existing guidance revised from time to time. For an up-to-
date list of guidance booklets check the OFT website at www.oft.gov.uk
All guidance booklets can be ordered or downloaded from the OFT website at
www.oft.gov.uk Or you can request them by:
phone 0800 389 3158

fax 0870 60 70 321
email oft@eclogistics.co.uk
post EC Logistics, PO Box 366, Hayes UB3 1XB

Published by the Office of Fair Trading
Printed in the UK on paper comprising 75% post-consumer waste and 25% ECF pulp
Product code OFT404
Edition 12/04 Printed: 12/04/2,000
© Crown Copyright 2004

Powers of Investigation: Understanding Competition Law

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Powers of investigation

Understanding competition law

The following are the Regulators:

• the Office of Communications (OFCOM)

• the Gas and Electricity Markets Authority (OFGEM)

• the Northern Ireland Authority for Energy Regulation (OFREG NI)

• the Director General of Water Services (OFWAT)

• the Office of Rail Regulation (ORR), and

• the Civil Aviation Authority (CAA).

2 Trigger for the use of the powers of investigation 4

3 Production of specified documents and information 6

4 Power to enter business premises without a warrant 9

5 Power to enter and search any premises with a warrant 13

6 Limitations on the use of the powers of investigation 19

7 Offences relating to the powers of investigation under 23

8 Powers of investigation in relation to exclusions 26

9 Power to assist the European Commission in its investigations 28

10 Power to assist National Competition Authorities of 32

1.3 Parts 3 to 5 of this guideline describe when each of these powers

available to investigate suspected infringements of Article 81 and

1.6 The Regulators have concurrent powers to investigate suspected

2 Trigger for the use of the

2.4 Parts 3 to 5 of this guideline describe the OFT’s formal powers of 8

3.2 It is not necessary for the section 26 power to be used before

3.3 A person may receive a notice requiring the production of documents

The scope of the power

3.5 The OFT can also:

3.6 The term ‘document’ includes ‘information recorded in any form’9. 9

on computer. ‘Specified’ means documents or information that are

3.8 The power to require the production of documents or information

the documents or information at a specified address on a designated

3.10 In specifying documents or information in a written notice, the OFT

3.12 The notice may be addressed to individuals or undertakings. Where a

4 Power to enter business

4.2 The power to carry out inspections without a warrant is described in 10

When the power can be used

4.4 An authorised officer may enter business premises in connection with

The scope of the power

4.5 An authorised officer entering business premises without a warrant

4.7 If the authorised officer is carrying out an inspection of business

4.8 If the authorised officer is entering the premises without a warrant

Access to legal advice

4.10 An undertaking being inspected will be able to contact its legal

5 Power to enter and

5.2 In relation to business premises, the Act identifies three

inspection of business premises with a warrant without using one of

The scope of the power

provide a list of documents and extracts from documents of which

5.6 In respect of business premises, the officers’ powers to take copies

• Where the warrant was granted because an authorised officer was

5.11 The warrant must indicate:

duty to leave a copy of the warrant in a prominent place on the

Access to legal advice

5.14 See paragraphs 4.10 to 4.11 above.

6 Limitations on the use of

which would be protected from disclosure in proceedings in the High

6.2 When the OFT is investigating suspected infringements of Article 81 16

6.3 Whilst UK privilege rules would apply to cases being investigated in

6.4 The European Commission’s privilege rules (which do not extend to