The Competition and Markets Authority (CMA) is increasingly prepared to target institutions, irrespective of size, where they consider that there is infringement of competition law. Non-compliance may result in large financial penalties or even a prison sentence for individuals falling foul of the law.
Created only two years ago, as the UK’s principal competition authority, the CMA has powers to investigate anti-competitive practices affecting trade in the UK and as can be seen below, it has the power to take significant action when an infringement is found.
What have the CMA been doing?
In 2015 there were two penalty decisions relating to infringements of the Competition Act 1998.
- The first case involved an association of estate and letting agents and a newspaper publisher who had agreed to restrict advertising in the local paper the fees charged by each agent or any discounts offered. The CMA decided that this group had infringed competition law and imposed penalties on the parties totalling over £735,000.
- The second case related to a membership organisation of private consultant ophthalmologists which had been providing anticompetitive information relating to pricing of procedures and engaging in pricing agreements. After accepting that they had infringed competition law, the CMA imposed a fine of £500,000 which was reduced to £382,500 following settlement and the adoption of a compliance programme by the organisation.
In February 2016, the CMA issued fines to Glaxo Smith Kline and other pharmaceutical companies, including parent companies, who were found to be directly involved in the infringement of competition law and were issued fines totalling £45m.
The CMA also prosecuted three directors involved in the supply of UK galvanised steel tanks used for water storage for alleged price fixing and bid rigging. Two directors were acquitted but one director, having pleaded guilty, received a suspended prison sentence.
There is one ongoing criminal cartel case which relates to the supply of products to the construction industry.
So what does this mean for you?
Where the CMA, Serious Fraud Office or any of the sector regulators believe that there has been an infringement of the law, they will undertake an investigation which may involve a dawn raid.
A dawn raid will have an immediate impact on the running of any business from the moment that investigators enter the reception area. If such an inspection is dealt with improperly it can lead to substantial fines for the business and in some instance, criminal sanctions against individuals. It is evident from reported cases that any finding of an infringement in civil or criminal cases will lead to significant financial penalties or worse, not to mention the reputational repercussions for all involved. It is therefore vital that companies understand their obligations, and are well prepared.
Would you be ready?
Birketts’ Dawn Raid Team offers the following services across the Eastern region in the event of a dawn raid.
- Out of hours contact and advice
- Urgent assistance and representation at your business premises; and preparation of appropriate internal procedures and policies to be implemented
- Training for the relevant personnel, from receptionist through to directors and senior management
- Preparation of appropriate internal procedures and policies to be implemented
In addition to the services of provided by our Dawn Raid Team, Birketts’ Competition Law Team can:
- review the contractual arrangements of a business for anti-competitive provisions
- advise on what constitutes anti-competitive behaviour
- advise on what steps to take if a business suspects that it is involved in anti-competitive behaviour, or is the subject of allegations of such behaviour.
If you would like to discuss your particular circumstances or requirements in more detail please contact Rafael Ruiz.