Ignorance is no defence

David Patterson, partner in Thrings’ Company Commercial team, comments:

The Competition and Markets Authority (CMA) has recently published the findings of research into knowledge levels about competition law among UK businesses. It found that, in general, larger businesses were better informed than smaller businesses but overall there was a poor understanding of competition law.

The research highlighted areas of risk:

  • 7% of businesses surveyed admitted to contacting their competitors directly to obtain their competitors’ prices

  • 9% admitted to discussing prices with other businesses in their industry

  • 20% of businesses were informed about the prices of their competitors by other businesses

  • although 41% of larger businesses had organised training on competition law, only 6% of smaller businesses had conducted training

  • 57% of businesses had not heard of the CMA

The CMA commissioned the research to update previous research carried out in 2011. The information derived from the research will be used to allow the CMA to focus on compliance.

The sanctions for infringing competition law are both criminal and civil: fines of up to 10% of worldwide aggregate group turnover can be imposed under UK or EU competition law, and individuals within businesses can be convicted for up to five years imprisonment and/or receive an unlimited fine.

The key message is that there are potentially individuals and businesses at risk of criminal and civil sanctions due to a poor knowledge of competition law, and the penalties. The CMA has a strategic goal to deliver effective enforcement: the research appears to indicate that businesses are breaching competition law, and the CMA will focus its activities in response.

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