Serious breaches of competition law by companies active in the EU are likely to result in enforcement action by the European Commission or EU member state competition authorities, such as the Office of Fair Trading (OFT) in the UK.
The most obvious competition law risk for private equity firms is the potential value impact on a portfolio company. The portfolio company may face significant fines if involved in a breach of EU or UK
competition law and may also face damages actions from harmed third parties.
Competition law investigations can also result in a substantial diversion of management time and have reputational consequences. However, there are a number of less obvious risks faced by private equity firms which should also be borne in mind.