How to avoid breaking competition law.

The results of a recent case which is the first such conviction under the new laws have led the Competition and Markets Authority to issue new rules and guidelines for company directors. A director of an online company agreed not to act as a director of any UK company for 5 years after his company was found to have been part of an online price-fixing cartel.

This case highlights the fact that company directors have a responsibility to be well-informed about their company practices and to ensure these practices comply with the law. It’s worth knowing that if caught breaking competition law, directors can be disqualified from acting as a director of a company or carrying out other specified roles in relation to a company for up to 15 years.

What this case highlighted was that knowing about illegal practices without taking steps to stop them could be grounds for disqualifying a director and if a company breaks competition law and the director wasn’t diligent and should have known, this is also a possible ground for disqualification.

As a director therefore it is vital that you keep abreast of your company’s affairs so you can spot and stop any illegal practices as soon as possible, if you suspect illegal business practices you should investigate and take immediate steps to stop them. If in doubt,  get independent legal advice. Familiarise yourself with competition law risks and make sure this information is cascaded down through all levels of management.

It pays to routinely ask yourself, what are our present competition law compliance risks? What are the high, medium and low risks and what are we doing to mitigate these risks? When are we next reviewing the effectiveness of these measures? It helps to designate a trustworthy person in your company for staff to report concerns to.

As always, if you are concerned about any aspect of competition law, why not give us a call?