On 1 December 2016, the Competition and Markets Authority
(CMA) announced that it had secured its first disqualification of a
director of a company found to have infringed competition
Daniel Aston, managing director of the online poster supplier
Trod, gave a disqualification undertaking not to act as a director
of any UK company for five years.
This disqualification follows the CMA's final decision of 12
August 2016 that Trod and GB Posters infringed competition law by
agreeing that they would not undercut each other's prices for
posters and frames sold on Amazon's UK website. The case
against Trod started when the CMA launched an investigation on 1
December 2015. As part of its investigation, the CMA conducted
searches at the headquarters of Trod, as well as the domestic
premises of one of its officers. In July 2016, Trod admitted
agreeing the infringement and agreed to accept a fine of
£163,371 for taking part in the cartel. This was after
deducting a 20 per cent discount to reflect the resource savings to
the CMA as a result of Trod's admission and cooperation with
the CMA's investigation.
Since 2003, the CMA has had the power to apply to the court for
a disqualification order against directors for a maximum of 15
years, where a company of which they are a director has breached
competition law and where conduct as a director makes the person
unfit to be concerned in the management of a company.
The law also allows the CMA to accept a disqualification
undertaking from a director instead of bringing proceedings. Where
a disqualification undertaking is offered, this will normally
result in some discount in the period of disqualification which the
CMA is prepared to accept.
Given that Mr Aston was the managing director of Trod at the
relevant time, and because he personally contributed to the breach
of competition law, the CMA considered that such conduct made him
unfit to be a company director for a specified period.
Leniency Policy and Director Disqualification
GB Posters applied for and obtained immunity, having reported
the cartel to the CMA. Under the CMA's leniency policy a
business that has been involved in a cartel may be granted immunity
from penalties or a significant reduction in penalty in return for
reporting cartel activity and assisting the CMA with its
investigation. Further, in respect of the activities to which the
grant of leniency relates, the CMA will not apply for a
disqualification order against any director whose company benefits
from such leniency, provided that he or she cooperates with the
leniency process. The only exception to this is where a former
director has been removed or otherwise ceases to act as a director
because of his or her breach of competition law and/or opposition
to the relevant application for leniency.
This is the first time the CMA has secured the disqualification
of a director and marks an important milestone in the successful
enforcement of competition law against individuals personally
involved. In the words of the Executive Director for Enforcement at
the CMA, Michael Grenfell, "The business community should be
clear that the CMA will continue to look at the conduct of
directors of companies that have broken competition law, and, where
appropriate, we are absolutely prepared to use this power
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