UK: Criminal Prosecution for Price-Fixing

Last Updated: 22 June 2006
Article by Guy Lougher

The Serious Fraud Office (SFO) has announced that it is bringing criminal proceedings against five companies and nine individuals following an in-depth investigation, reported to be one of the largest it has ever conducted, into the pharmaceutical sector.

In 2002, the SFO and the police conducted a series of investigations at both company and domestic premises associated with six pharmaceutical companies into suspected fraud on the National Health Service following a prompt from the Department of Health. Subsequently the SFO opened an investigation into price-fixing and market-sharing by these companies in the supply of generic drugs (including warfarin, a blood-thinner).

The SFO has now announced that it has commenced criminal proceedings alleging conspiracy to defraud in relation to the pricing and supply of these drugs between January 1996 and December 2000.

The Department of Health has brought parallel civil proceedings against the companies, claiming damages arising out of anti-competitive agreements between them in relation to the supply of certain generic drugs. Three of the companies facing criminal charges have reached settlements with the Department of Health in relation to these civil proceedings, making payments which reportedly totalled approximately Ł30 million.


Since the Enterprise Act 2002 came into force on 20 June 2003, an individual who has been dishonestly involved in hard-core cartel behaviour can be subject to criminal sanctions.

The maximum punishment for the 'cartel offence' is 5 years' imprisonment and/or a fine. The allegations in the SFO's investigation relate to a period prior to the Enterprise Act 2002 and are based therefore on charges of criminal conspiracy to defraud. If similar activities to those alleged took place now, they could well be caught by the criminal cartel offence.

Businesses should be aware that not only are companies exposed to fines and damages claims for breaching EC or UK Competition Law, but that individuals are also at risk of committing the criminal cartel offence. They may also become subject to Director Disqualification Orders.

First Damages Claim for CAT Under Competition Act

The Competition Appeal Tribunal (CAT) has received its first ever third party claim for damages based on an infringement decision of the Office of Fair Trading (OFT).

Under the Competition Act 1998 (the Act), third parties can bring a claim before the CAT if they have suffered loss or damage and the OFT or the CAT has found that there has been an infringement of Chapters I or II of the Act (so called 'piggy-back' actions). A similar principle applies where the European Commission, the OFT or CAT has found a breach of Articles 81 or 82 of the EC Treaty.

In 2004, the CAT confirmed in part the OFT's finding that Genzyme, a global biotechnology company, had abused its dominant position under Chapter II by operating an abusive pricing policy that effectively foreclosed the market for the provision of certain home care services to companies other than Genzyme.

In April 2006, one of the companies affected by Genzyme's pricing policy, Healthcare at Home, lodged a claim in the CAT against Genzyme for damages, together with a declaration of entitlement to an account of profits in respect of losses it claims to have sustained because of Genzyme's abusive conduct. The claimant has also requested exemplary damages (i.e. damages to punish Genzyme, rather than simply to compensate the claimant) - if the CAT grants the request, this would be the first time an English court or tribunal has made such an award in a competition case.


Whether this claim for damages will proceed to judgment is still an open question. Two previous damages claims brought before the CAT based on a European Commission infringement decision in the Vitamins Cartel were settled confidentially out of court. It is clear, however, that if as a result of this new claim the legal framework for seeking damages proves to be sufficiently robust, then it may trigger a flow of damages claims before the CAT and UK courts.

More generally, the desirability of encouraging third party private enforcement actions has recently been the subject of a Green Paper on Damages Actions issued by the European Commission. The Commission suggests that a competition law specific remedy of double damages awards might be necessary, both in order to incentivise claimants as well as to deter possible infringers. Consultation on the Green Paper has ended and the Commission is reviewing its next steps.

OFT Guidelines on involving third parties in Competition Act investigations

The OFT has published guidelines on a new formal policy for consulting third parties in Competition Act investigations. The guidelines set out the circumstances in which complainants and other third parties will be provided with a formal and structured opportunity to comment on the OFT's provisional findings in an investigation. The OFT expects the policy to contribute to robust decision-making by ensuring that third party views are taken into account before the investigation is concluded. The guidelines also contain guidance on how to complain to the OFT about anticompetitive behaviour, as well as setting out the type of information that should be included in a written complaint.

Commission publishes Provisional Findings in Home Credit Inquiry

In 2004 the OFT referred to the Competition Commission for investigation the supply of home-collected credit in the UK. The Commission has now published its provisional findings report as well as a notice of possible remedies. Home credit loans are mostly small value cash loans. The vast majority of home credit lending is carried out by agents who visit customers' homes to collect repayments on a weekly basis.

Following an inquiry of some 16 months, the Commission has provisionally found that customers value the Home Credit product but may be paying too high a price for it, due to a lack of competition in the sector. The Commission has proposed potential remedies to this lack of competition, which include an obligation on lenders to share data relating to creditworthiness of customers, the publication of prices and the possibility of imposing a price cap on the industry.

Affected lenders and other parties now have a chance to comment on the findings and proposed remedies. A final report from the Commission into home credit is expected to be published in late summer or autumn of this year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.