The UK government is getting serious about criminal enforcement of cartel activity. A recent simplification to the criminal offence has been designed with the stated intention of ensuring more convictions. The CMA intends to bring
“as many new criminal cartel investigations as possible.”
Criminal Sanctions for Individuals
- A maximum of 5 years imprisonment,
- an unlimited confiscation of assets, and
- if a director, be disqualified for up to 15 years.
In a recent case 2 individuals had over £1 million seized and received a combined 4 ½ years in prison.
The Old Law
Until 2014, the prosecution needed to show that individuals dishonestly agreed. Many trials collapsed or ended in acquittals that the Prosecution Service all but gave up on criminal enforcement.
The New Simplified (for Prosecutors) Law
Now, the prosecution needs to show merely that individuals agreed to:
- Fix prices,
- Share markets,
- Share customers,
- Limit production/supply, or
- Rig bids.
Note that there is no requirement that the agreement actually breaches competition law!
For example: two companies agree to share customers, which does not violate competition law because of some defence (e.g. efficiencies). There is no such defence in the criminal offence, so it is possible that reaching a legal agreement carries criminal sanctions for the individuals.
In 2016 there have been 6 new cartel investigations formally opened by the CMA, in addition to other ongoing investigations. Also, when sector regulators’ investigations are included in this figure, is much higher which may lead to criminal prosecutions.
What Can You Do?
It is crucial that individuals seek advice on their potential personal liability even if the companies involved have been given the all clear by the lawyers. It is also important to remember that company lawyers advise the company, not the employees!
For companies it is important that employees are fully aware of the law, which can be achieved through adequate training and internal procedures, and most importantly, a competition-compliance policy.