I’m reading Daniel Sokol’s ‘Policing the Firm’ (2013) 89 Notre Dame LR 785, and I’m finding his discussion of the role of ‘stigma’ in cartel enforcement interesting.
It’s led me to think about compliance programmes. If firms want to be given credit for having an ‘effective’ compliance programme could the CMA/DG Comp insist that within that programme there are real sanctions in discipline, demotion, or dismissal for all officers or employees who were engaged in cartel activity?
Would that make a scheme a more effective part of creating the right corporate compliance culture?
What is the impact of the ‘legal advice’ defence to the cartel offence in s 188B(3) of the 2002 Act? Could it make it easy to escape prosecution?
This week I delivered my UG competition law lecture on Cartels. It’s an occasion I always enjoy and gives me an opportunity to approach the topic afresh on an annual basis [the feedback I receive is always extremely helpful too]. This year it was the first time that I had the opportunity to talk through the new defences to the UK cartel offence since the controversial ‘dishonesty’ element was removed by the Enterprise and Regulatory Reform Act 2013. I have described one of the new defences inserted into the Enterprise Act 2002, the ‘legal advice’ defence in s 188B(3), as ‘bizarre’ in the new edition of our textbook, but in this post I want to set out what I perceive the problems to be. I want to develop these ideas into a longer piece, but for now I want to pose some of the questions I think need answering. My fear is that the ‘legal advice’ defence could become a get out of jail free card rendering the UK cartel a dead letter in all but the most extreme cases. Read More…
It was reported on the 5th April that Northern Circuit barristers had voted to reject the planned QASA scheme of ‘Quality Assurance’ for advocates. That in itself is interesting but my ‘competition-dar’ was triggered by a second vote the Northern Circuit also took. Quoting from the Law Society Gazette:
‘all 460 barristers who took part voted to refuse to accept instructions on the Western and Midlands circuits if the barristers on those circuits refused to join the scheme’.
To them this must have seem like an act of solidarity and direct/industrial action to support their colleagues in other circuits and bolster support for their campaign against the imposition of QASA. However …
To a competition lawyer that action looks rather different. Is this a groups of independent economically active undertakings (practicing self-employed barristers) getting together and agreeing a market sharing or collective boycott scheme; by refusing to take work from a defined geographical area to support another group of undertakings? An agreement not to compete in a market and leave work to another in return for some benefit from them (or alternately the threat of taking work unless they act in a proscribed fashion) is mutually beneficial market sharing (or a collective boycott).
That looks to me as if it would be an agreement between undertakings, or a decision of an association of undertakings, fulfilling the terms of Art 101 TFEU or, as if may not effect trade between EU Member States, section 2 of the Competition Act 1998. That would make it unlawful and automatically void, and could, if investigated by the OFT, result in hefty fines being imposed.
A more extreme view could even see this as falling under s 188 of the Enterprise Act 2002. If the actions of the Northern Circuit were seen as being individuals ‘dishonestly agreeing’ to ‘make or implement’ and agreement to ‘divide between A and B customers for the supply in the United Kingdom of a product or service’, they may be committing a criminal offence under ss 188. If convicted sentences of imprisonment up to 5 years are available.
I’m not suggesting that arrests or OFT dawn raids can be expected across northern chambers. But perhaps the bar might want to think more careful about how they conduct their campaign. They might not benefit from the traditional limitations on the application of the competition rules to collective action taken by trade unions.
There might not be a lot of competition law work on the Northern Circuit but someone might want to dust off a competition law textbook before they take their next move. I can suggest a good one …
In October 2012 Christopher Brown posted an interesting blog on AG Kokott’s opinion in Case C-226/11 Expedia. The full judgment was delivered on 13 December 2012 and it seems appropriate to look at whether the Court followed the same line; or whether there was an ‘appreciable’ difference.
The Court of Justice, on 6 December 2012, delivered an interesting judgment examining the legal liability for a ‘bit player’ in a large cartel. The question whether a peripheral member of a cartel can be held liable for the whole infringement raises a number of questions of fairness, but there is no doubt that the Commission finds the ‘single continuing infringement’ concept important in making its investigations into on-going cartel activity much easier. It also reminds me of the well know aphorism, ‘you can’t be a little bit pregnant’.