On February 8, 2023, High Court of Justice and the Competition Appeal Tribunal (“CAT”) issued a decision relating to the power of the Competition and Markets Authority (“CMA”) to request documents and information under section 26 of the Competition Act of 1998 from companies domiciled outside the UK, holding that the CMA does not have the power to request information held outside of the UK from companies that are also domiciled outside the UK. Two automobile manufacturing companies established in Germany, Bayerische Motoren Werke AG (“BMW AG”) and Volkswagen Aktiengesellschaft (“VW AG”) had challenged the CMA’s requests for documents and information issued as part of an investigation into possible anti-competitive conduct related to the recycling of end-of-life vehicles. While both companies had UK subsidiaries, the companies asserted that section 26 did not give the CMA the power to compel the production by the German companies of documents held outside of the UK because neither of the German companies had branches or offices in the UK and had no link to the UK apart from the subsidiaries.
According to the judgment, BMW UK and BMW AG took certain steps to comply with the section 26 notice received from the CMA; however, BMW AG ultimately informed the CMA that it would not be responding to further notices as they were beyond the scope of section 26. In December 2022, the CMA issued a penalty notice to BMW AG for failing to comply with the request for information. In response, BMW AG appealed to the CAT to challenge the imposition of the penalty. VW AG also challenged a similar request for documents by the CMA, but filed its challenge by means of a judicial review to the High Court of the CMA’s ability under section 26 to request documents from companies established outside of the UK. Because both cases concerned interpretation of section 26, the High Court and the CAT issued a single judgment confirming that the CMA does not have the power to compel the production of documents held outside the UK by companies without any link to the UK other than subsidiaries. More specifically, the courts held that the section 26 notices sent by the CMA to BMW AG or VW AG were ineffective. The courts also overturned the penalty the CMA had imposed upon BMW AG.