UK competition authorities step up their enforcement acitivity against cartels and other anti-competitive agreements

10th February 2017

Matthew O’Regan, a member of our competition team reviews the CMA’s recent civil and criminal investigations into cartels and other anti-competitive agreements, as well as the first Competition Act investigation by the Civil Aviation Authority.

Compliance with competition law remains an important factor for businesses large and small. On 9 February 2017, the UK’s principal competition authority, the Competition and Markets Authority (“CMA”), announced that it suspected a Poole-based distributor of lighting products of having broken the Competition Act 1998 by preventing retailers from freely determining their prices when selling online.

The CMA’s investigation is on-going. However, it forms part of an increase in enforcement activity by it. In its draft annual plan for 2017/2018, the CMA made clear that it intends to step up the rate of its enforcement of UK competition law, both in terms of the number of investigations it undertakes and the time each one takes. Businesses large and small will therefore see a significant increase in CMA enforcement activity against cartels and other anti-competitive practices, using both its civil and criminal powers.

These investigations have covered a wide range of products, including bathroom fittings, pharmaceuticals, furniture drawers, steel tanks, wall posters, airport car parking, fashion modelling and golf equipment. They have also covered many different types of conduct, including price-fixing cartels, market-sharing, bid-rigging, exchanges of commercially sensitive information, restrictive rules of trade associations and restrictions on on-line sales and price advertising.

The CMA has imposed significant fines on companies; others have avoided fines by informing the CMA of their illegal conduct. One individual has been disqualified as a company director and another awaits sentence after pleading guilty to having entered into a hardcore cartel agreement.

It is clear from recent cases and the CMA’s commitment to increased enforcement that business will remain under considerable antitrust scrutiny. Investigations can start in all sorts of ways: leniency applications, whistleblowing by employees, complaints by customers or competitors, and the CMA’s own intelligence-gathering activities.

Businesses, large or small, should therefore not be complacent and think that a CMA investigation will not happen to them. They should ensure that their commercial agreements and practices are compliant with UK and EU competition law. This includes past agreements and practices, which the CMA can also investigate. If there is any doubt as to compliance, legal advice should be taken. In appropriate cases, where there is evidence that a business has engaged in an illegal ‘hardcore’ cartel or resale price maintenance, making a leniency application to the CMA could gain it immunity from, or at least a reduction in, fines.

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If you would like to instruct Matthew on a related matter please contact his clerks: [email protected] or 0117 923 4740.