Competition law – the temperature rises
15 / 03 / 2017
Businesses often complain that competition law is difficult to understand. There’s a lot of truth in that. But some things are clear; and the stream of fines that the Competition and Markets Authority (the UK’s competition law regulator) has recently been issuing provides some readily-comprehensible pointers to how to keep on the straight and narrow. We summarise some of them below.
Beware dodgy meetings
Invited to join an illegal market-sharing cartel at an industry meeting that it attended, Balmoral Tanks Limited quite properly refused. But, before it walked out of the meeting, it disclosed information about its current pricing and future pricing intentions; and that was enough to fix it with a £130,000 fine, despite its rejection of the cartel. (Of course, those who joined the cartel collected even more severe punishments…including a prison sentence imposed on one of the company directors involved).
Moral: Exchanging commercially-sensitive information at industry meetings is one of the easiest competition-law traps to fall into. (Especially if the meeting is secretly recorded by the CMA…as it was in this case!)
Let your online retailers set their own prices
Tempted to try to protect your bricks & mortar retailers by putting a brake on your online retailers’ discounts? Resist the temptation! One supplier after another has suffered the CMA’s adverse attention for this very reason, and in the last twelve months alone more than £3,000,000 worth of fines have been imposed in situations of this kind.
Moral: With more and more retail activity moving online, it has become a priority for the CMA to crack down on online resale price maintenance. Avoid becoming one of their statistics.
Don’t get disqualified!
It’s often forgotten that one of the many weapons in the CMA’s armoury is to have people disqualified from holding company directorships. Which is precisely what happened recently to Mr Aston, MD of a company that unwisely agreed with one of its online competitors not to undercut each other’s prices. The ruling made English legal history, though this will presumably be of little consolation to Mr Aston over the next five years.
Moral: Keep out of the legal history books, and avoid any non-undercutting arrangements.