The UK's national competition authority, the
Competition and Markets Authority ("CMA"), has today
announced its acceptance of a binding disqualification undertaking
given by an individual not to act as a director of any UK company
for a period of five years.1
This marks the first time that the CMA has exercised its
statutory director disqualification powers under the Company
Directors Disqualification Act 1986.2
These powers enable the CMA to seek the disqualification of an
individual from holding company directorships in the UK, in
circumstances where that individual has been a director of a
company that has infringed UK and/or EU competition law.
Under these powers, the CMA may apply to the court for a
disqualification order against an individual, or accept a binding
disqualification undertaking from an individual, with the maximum
period of disqualification being 15 years.
Posters and frames: the CMA's investigation
The disqualification undertaking accepted by the CMA was
provided by an individual who had previously acted as the managing
director of Trod Limited ("Trod"), an
online supplier of posters and frames based in the UK.
Following an application for immunity by one of Trod's
competitors, GB eye Ltd ("GB Posters"),
the CMA commenced an investigation in September 2015 into
arrangements between Trod and GB Posters.
The CMA found that the parties had infringed UK competition law
by arranging not to undercut each other's prices for certain
posters and frames sold via Amazon UK, with the arrangements
lasting for more than four years.3
As the successful immunity applicant, GB Posters did not receive
a financial penalty in respect of its involvement in the
infringement. However, Trod was fined around £164,000 by the
CMA, with this fine including a 20% reduction in light of Trod
entering into a settlement agreement and admitting the
In a separate investigation launched by the US Department of
Justice, Trod pleaded guilty in the US in August 2016 to conspiring
to fix the prices of posters sold online.4
Individual liability: director disqualification and the Cartel
Following this investigation, the CMA considered that the
conduct of Trod's managing director - who the CMA had found had
personally contributed to the infringement of UK competition law -
rendered him unfit to act as a company director for a specific
period of time.
After the CMA indicated its intention to seek a director
qualification order, the individual in question opted to give the
CMA a binding qualification undertaking.
Conversely, the CMA did not seek any director disqualification
orders in relation to GB Posters. This follows the CMA's
leniency policy, which provides that the CMA will generally not
seek disqualification orders against directors of a company
benefitting from leniency (in respect of the activities to which
Importantly, the CMA's announcement should be seen as a
continuation of a policy step-change in the UK, which seeks to
ensure that individuals are held responsible for anti-competitive
Against this background, the CMA has actively grown its Cartels
and Criminal Group, with the express intention of increasing
enforcement action against cartels, under both the civil and the
Further, the reform of the criminal Cartel Offence, which we have considered
previously, intentionally lessens the evidential burden upon
the CMA when seeking to prosecute individuals, with the aim of
enabling a greater number of successful prosecutions to be brought
in the UK.
Engaging with compliance concerns at an early stage
As highlighted in the investigation into posters and frames, the
CMA's leniency programme provides an obvious incentive for
individuals and companies proactively reporting cartel to the
Moreover, with the CMA increasingly active in its enforcement
efforts, individuals and companies would be well-advised to
consider carefully any potential exposure, and take appropriate
action and advice at the earliest possible opportunity.
Our EU, Trade & Competition team acts on high
profile cartel investigations, and frequently advises clients upon
making immunity and leniency applications. In addition, with a
20-strong Dawn Raid Response team of civil and criminal law
specialists, as well as IT experts, located across our UK offices,
clients rely upon us to deal effectively with the most complex of
competition investigations. Our presence in Birmingham and London
means that we are positioned to respond immediately, providing
vital support at sites across the country, when clients need this
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