In March 2022, the UK Competition and Markets Authority launched an investigation into suspected infringements of Chapter 1 of the Competition Act 1998 by several automobile manufacturers and related industries. The European Commission launched a separate investigation at the same time. The focus of these investigations is the recycling of old or written-off vehicles (end-of-life vehicles or ELVs) and the use of recycled materials in cars. Within the framework of the initial investigation, the CMA sent information requests to the German automobile manufacturer Bayerische Motoren Werke AG (BMW AG), among others, in the belief that the suspected anticompetitive conduct was driven by agreements made outside of the United Kingdom yet implemented inside the country.
BMW AG answered the Section 26 notice in part, providing documents connected with its UK subsidiary, but not with the regard to the parent company, by the April 19, 2022 deadline for the provision of the requested documents. The company claimed that the CMA does not have the power to require a company -- rather than an individual -- domiciled in Germany to respond to Section 26 notices, and that it would risk breaching its obligations under German and European data protection law, were it to provide the additional documentation requested by the CMA..
Requests for information are issued by the CMA pursuant to its authority under Section 26 of the Competition Act 1998, and responses are mandatory.
Section 40 of the Competition Act 1998 authorizes the CMA to impose an administrative penalty on any party that, without reasonable excuse, fails to comply fully with a Section 26 notice. The CMA did not accept BMW AG’s contention that it does not have jurisdiction over the company in the context of this investigation, and therefore issued both a fixed penalty of £30,000 for non-compliance with the Section 26 requests for information, and a daily penalty £15,000 beginning on the date when the penalty notice was served on BMW AG. The daily penalty will cease to accumulate when the Section 26 notice is satisfied, when the CMA terminates the investigation or concludes that there has been an infringement of Section 2 of the Competition Act 1998, or at an earlier date determined by the CMA.
BMW AG has the right to appeal the penalty to the Competition Appeal Tribunal.