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Competition law - new dangers for directors

Recent dawn raids (and an arrest) in the commercial vehicle sector have highlighted the importance of competition compliance.

The investigation is led by the OFT, which can prosecute individuals and businesses involved in serious anti-competitive practices.

Although the spotlight is on commercial vehicles, this is not the only ongoing investigation in the automotive sector and the OFT may cast its net wider in due course.

Miles Trower, competition partner at national law firm TLT, said: "The OFT has had its nose bloodied recently with the collapse of criminal proceedings against several British Airways executives, but is fighting back, redoubling its efforts to punish illegal activities."

A possible scenario is two dealers discussing model pricing to ensure neither undercuts the other.

The issues go wider than price fixing; a single meeting between individuals from rival groups where sensitive commercial information is exchanged can expose those businesses and senior management to competition risks.

Certain topics are legitimate, say, discussions on motor industry regulation, but it is important that individuals don't cross the line.

Trower said: "Aside from fines for serious infringements, the OFT can apply to have directors disqualified for up to 15 years.

"Businesses need to take this on board because the OFT now intends to apply this penalty, not simply to senior executives who were personally involved, but also to those who 'ought' to have known about an infringement, but who failed to take steps to uncover or remedy it.

"All directors, even non-execs, both in the automotive sector and elsewhere, must take an active role in ensuring competition compliance."

Nicola Kingaby, associate and leader of TLT's 'Dawn raid response team' comments: "Often, the first time a business comes to us for competition advice is when the OFT arrives unannounced at its doorstep demanding access.

"By that stage all we can do is to help our clients limit the damage.

"Too often we see businesses punished for offences that had they made a small investment in training and guidance upfront would never have happened in the first place."

> For any queries connected with this bulletin, or if you would like further information about compliance programmes, staff training or dawn raids please contact Miles Trower (0117 917 7652 or miles.trower@tltsolicitors.com) or Nicola Kingaby (0117 917 7869 or nicola.kingaby@tltsolicitors.com)
 

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