For the first time since the sanction was introduced in 2003,
the UK's Competition and Markets Authority (CMA) has secured
the disqualification of the director of a company found to have
breached competition law. This serves as an important reminder of
the CMA's powers to sanction individuals found to have
participated in unlawful anticompetitive behavior. In addition to
disqualification orders, the CMA has the power to fine an
individual or prosecute under the criminal cartel offense. These
proceedings are separate to any fines which the CMA may impose on
the companies which the directors manage and are designed to deter
individuals from getting involved in or ignoring breaches of
Daniel Aston, former managing director of Trod Ltd, is banned
from acting as a director of any UK company for the next five
years. In August 2016, the CMA fined Trod £163,371 (USD
207,000) after finding that the poster and frame retailer had
agreed with a competitor, GB Eye Limited (GBE), not to undercut
each other's prices on the online retail platform Amazon.
Under the Company Directors Disqualification Act, the CMA has
the power to order the disqualification of a director for a maximum
of 15 years, where the company of which he is a director has
breached competition law, and the director is found to have
conducted in a manner that makes him unfit to be responsible for
the management of a company. This includes not only directors that
are directly involved in competition law breaches but also those
that had reasonable grounds to suspect that there was a breach and
took no steps to prevent it, or did not know but ought to have
known that there was a breach.
The CMA found that Mr. Aston had personally contributed to
Trod's breach of competition law, as he had caused the company
to enter into and implement the agreement with GBE. In particular
Aston had introduced automated re-pricing software at Trod, which
was configured to give effect to the cartel.
The CMA can disqualify a director either by way of a court order
following a director's conviction for a criminal cartel
offense, or by way of an undertaking offered by the director. In
this case, Aston offered the CMA a disqualification undertaking
before court proceedings against him had started. In consideration
for his cooperation, the CMA reduced the period of disqualification
to five years. In contrast, having reported the cartel to the CMA,
GBE and its directors were granted total immunity from fines and
disqualifications under the CMA's leniency policy.
If an individual breaches a competition disqualification order
or undertaking, he may also be prosecuted for a criminal offense
and face imprisonment and personal fines.
Director disqualification for breaches of competition law
remains rare. In 2008, English courts disqualified, for five to
seven years, three directors who pleaded guilty to their
involvement in a price fixing, market sharing and big rigging
cartel (Marine Hose). However, the directors were
disqualified under the general disqualification regime, which
applies to any director convicted of an offense in connection with
the management of a company rather than under the competition
disqualification regime. Nevertheless, this latest disqualification
case illustrates the CMA stated determination to protect consumers
and benefit business and the wider economy by the vigorous
enforcement of competition law by focusing on the deterrence of
individuals through prosecutions under the criminal cartel offense
and the disqualification of directors.
The UK's Competition and Markets Authority (CMA) is consulting on changes to the UK merger regime proposed to reduce the burden of investigations into mergers where the parties operate in small markets.
The UK Competition and Markets Authority ("CMA") has a duty to refer a transaction for an "in depth" phase 2 investigation in instances where it believes that there is a realistic prospect of a transaction resulting in a "substantial lessening of competition", subject to certain exceptions.
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