6th December 2016

Breaking competition law has consequences

The Company Directors Disqualification Act 1986, as amended, gives the Competition and Markets Authority (CMA) powers to either apply to the courts for a disqualification order to be made against a director (where a company of which he is a director has breached competition law), or accept a disqualification undertaking. A disqualification order can be made for a maximum period of 15 years.

The CMA has just secured the first such disqualification under the Act against a Mr Daniel Aston, the managing director of online poster supplier, Trod Ltd. Mr Aston’s company was found to have breached competition law following a decision by the CMA made on 12 August 2016.

Trod Ltd had reached an agreement with an online competitor not to undercut each other’s prices, and implemented the agreement by way of automated re-pricing software. The company was fined £163,371. In addition, the CMA considered that Mr Aston's conduct as managing director made him unfit to be a company director. Mr Aston agreed to give a disqualification undertaking to the CMA not to act as a director of any UK company for a period of five years.

The CMA Executive Director for Enforcement stated: “The responsibility to ensure that companies don’t engage in illegal anti-competitive practices is an important one, and company directors should not shirk that responsibility. 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 again.”

The business community should heed the warnings in general issued by the CMA as to the consequences of breaching competition law.

For help and advice on competition law issues, please contact David Patterson.

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