On 1 December 2017 the Competition and Markets Authority (CMA) published a notice imposing a penalty of £20,000 on Hungryhouse Holdings Limited. The penalty relates to Hungryhouse’s alleged failure to properly comply with an initial information request under section 109 of the Enterprise Act 2002 during the CMA’s Phase II review of its acquisition by Just Eat plc.5 The CMA has identified 49 unique documents (subsequently submitted by Hungryhouse in response to later information requests) that were responsive to the initial information request but were not submitted in response to that request. Among these documents are material emails between the CEO of Hungryhouse’s parent company and major investors, and a key substantive document.
In finding that Hungryhouse had no reasonable excuse for its failure to comply properly with the initial information request, the CMA criticised Hungryhouse’s decision to narrow the search terms used to identify relevant documents and noted that Hungryhouse should have ensured that it had sufficient resources to properly comply with the request, engaging external advisers if necessary. The CMA highlights that Hungryhouse should have raised with the CMA any concerns it had about the scope of the initial information request or the practicality of responding to it within the given timeframe, especially as it had been given the opportunity to comment on a draft version.
The CMA considers that the fine is appropriate and proportionate as the failure to comply properly was significant, both in terms of the number and key nature of the documents. It also had an adverse impact on the inquiry, notably (i) obliging the CMA to carry out significant further information gathering and (ii) risking a decision being taken on the basis of incomplete evidence had the CMA not noticed the omission of responsive documents.