UK Competition Watchdog Launches Probe Into Possible Financial Services Cartel

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    The competition watchdog of the United Kingdom announced that it has launched a probe into possible financial services cartel.

    The Competition and Markets Authority (CMA) said that its investigation into the alleged anti-competitive activity was started under Chapter One of the Competition Act 1998. Th said act addresses price fixing and attempts to control the markets.

    The statement of the watchdog revealed very little detail regarding the investigation. It simply stated: “The case is at an early stage and no assumption should be made at this point that competition law has been infringed.” The probe started last Tuesday.

    It cautioned that it was making no assumptions as to guilt. It also said that it had not yet issued any notices to any of the parties under the said investigation.

    It added: “The CMA has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections to any of the parties under investigation.”

    Normally, a statement of objections would enable the CMA to outline its preliminary conclusions, giving the subjects of the probe some time to respond prior to coming up with a final decision.

    It added that the matter that it is currently looking into could have also been supervised by the Financial Conduct Authority (FCA). The FCA also bears the responsibility for tackling infringements of competition law in financial services. However, it said that the two regulators had agreed that the CMA would be the one to take it forward.

    A competition partner in London at the law firm Morgan Lewis, Frances Murphy, pointed out that the new probe was the “latest in a string of sectoral investigations by the CMA.” In past months the competition watchdog has conducted investigations into investment consultants and auditors.

    Murphy continued: “The scope of the investigation is currently unclear and the key word so far is ‘suspected’, as this is a preliminary stage in potential proceedings. We would expect to see more detail from the CMA in the coming weeks and months.”