First UK Prison Sentences For Criminal Price-Fixing Will Encourage Greater Competition Law Compliance
The sentencing, on 11 June 2008, of 3 former executives to
significant terms of imprisonment for their part in a global
cartel to fix the price of marine hoses will send a powerful
message around the UK business community that the courts will
not tolerate serious anti-competitive behaviour such as
bid-rigging, customer sharing and price fixing.
The convictions and sentences relate to a sophisticated
cartel, involving companies in several jurisdictions, that is
alleged to have caused purchasers to pay at least 15% more than
the competitive price for the goods in question.
Guy Lougher , Head of the EU and
Competition Group at international law firm Pinsent Masons,
stated that "this first UK criminal prosecution for
unlawful anti-competitive behaviour has set a benchmark for
subsequent courts to follow. The trial judge's observation
that prison sentences could be even higher for any cartels
initiated after the implementation in the UK of the criminal
law provisions in June 2003 demonstrates that the UK courts are
prepared to use the full spectrum of the 5 year maximum prison
sentence. These judicial comments, coming on top of the
OFT's recent unilateral offer of 100,000 for
information leading to the uncovering of cartels, as well as
the OFT's use of powers to raid domestic premises, will
have a major unsettling effect on any companies and individuals
presently engaged in cartel activity. I expect these three
developments will make the OFT's already successful
leniency provisions even more attractive for any cartelists
tempted to break ranks."
The UK prison sentences of between 30-36 months exceeded the
duration of the sentences imposed by the US courts in 2007 on
the same individuals in relation to the same cartel. The US
prison sentences, which at the time were the lengthiest ever
imposed in the US on foreign nationals for antitrust
violations, will not now need to be served separately. This is
because the UK sentences satisfy the terms of an arrangement
between the US and UK authorities that permit the US prison
sentences to be served in the UK.
All three individuals were also the first in the UK to be
disqualified from acting as company directors for periods up to
7 years because they had infringed EU or UK Competition Law.
Given that this is the first such case, the Court has again set
the punishment at a high level because the maximum duration for
which an individual can be disqualified from acting as a
director for breaching the...
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