UK Competition Authority Secures Disqualification Of Director For Five Years

Co-authored by Kevin A. Nkugwa

On 1 December 2016, the Competition and Markets Authority (CMA) announced that it had secured its first disqualification of a director of a company found to have infringed competition law.

Background

Daniel Aston, managing director of the online poster supplier Trod, gave a disqualification undertaking not to act as a director of any UK company for five years.

This disqualification follows the CMA's final decision of 12 August 2016 that Trod and GB Posters infringed competition law by agreeing that they would not undercut each other's prices for posters and frames sold on Amazon's UK website. The case against Trod started when the CMA launched an investigation on 1 December 2015. As part of its investigation, the CMA conducted searches at the headquarters of Trod, as well as the domestic premises of one of its officers. In July 2016, Trod admitted agreeing the infringement and agreed to accept a fine of £163,371 for taking part in the cartel. This was after deducting a 20 per cent discount to reflect the resource savings to the CMA as a result of Trod's admission and cooperation with the CMA's investigation.

Director Disqualification

Since 2003, the CMA has had the power to apply to the court for a disqualification order against directors for a maximum of 15 years, where a company of which they are a director has breached competition law and where conduct as a director makes the person unfit to be concerned in the management of a company.

The law also allows the CMA to accept a disqualification undertaking from a director instead of bringing proceedings. Where a disqualification undertaking is offered, this will normally result in some discount in the period of disqualification which the CMA is prepared to accept.

Given that Mr Aston was the managing director of Trod at the relevant time, and because he personally contributed to the breach of competition law, the CMA considered that such conduct made him unfit to be a company...