Earlier this month, we reported that three UK nationals had pleaded guilty in the United States to participating in a bid rigging cartel in the marine hose industry. In return, they received record prison sentences of 30 months, 24 months and 20 months respectively.
The OFT has today confirmed that these individuals have now returned to the UK and have been charged with cartel offences under the Enterprise Act 2002. They have been released on bail pending their appearance in court in the New Year.
These individuals now have the dubious honour of being the first persons to be charged with cartel offences in the UK. If convicted, they could each face up to five years in prison and/or an unlimited fine.
The OFT has also confirmed that the European Commission is carrying out a separate civil investigation into the cartel. If it finds that the competition rules have been breached, the companies involved could face significant fines of up to 10% of worldwide group turnover. The European Commission views cartels as the most serious form of anti-competitive conduct and earlier this year it imposed a record fine of €990 million on members of a lifts and escalators cartel.
Today's development follows an international investigation by competition authorities throughout the world into the cartel. The UK nationals, along with five other individuals, were arrested in Houston, Texas whilst attending an industry conference. The authorities coordinated their activities so that the arrests coincided with onsite inspections by the OFT in the UK (one of which involved the search of a home address) and the European Commission.
This development should act as a warning shot to any individuals involved in a cartel – the OFT has the ability and the resolve to prosecute those involved in cartel activities. For the "marine hose three", the festive period will no doubt be a rather subdued affair with the prospect of a less than prosperous New Year.
MacRoberts has extensive experience in dealing with cartel investigations and leniency applications. Immediate specialist help is imperative when dealing with the OFT to ensure that your interests are fully protected. We also offer full competition law training, compliance and audit services.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
