The news broke yesterday that the first fully contest trial in relation to the ‘old’ UK cartel offence results in both defendants being acquitted after the jury deliberated for “only a couple of hours”. As the ‘old’ cartel offence is no longer with us, being substantially amended in ERRA 2013, the wider impact of the acquittal might be perceived as being limited, but there are still lessons to be learned from what we know about the acquittal.
(By Scott Summers)
Since the latter part of 2014, the Conservative party has promised that if it won at the 2015 General Election, it would repeal the Human Rights Act 1998 (HRA) and enact a new British Bill of Rights (BBR). Now that the Conservatives have won the General Election by achieving a majority in the House of Commons, this plan could come to fruition. Whilst many have discussed the potential legal implications of repealing the HRA, there is one area of contention that has been completely overlooked; namely, the impact that repealing the HRA will have on competition law proceedings. This blog post seeks to address this issue by considering the implications that repealing the HRA may have on s.188 of the Enterprise Act 2002, (hereafter, the ‘UK criminal cartel offence’).
By Bev Williamson
Premiership Rugby Limited (the PRL) is the company that commercialises premiership rugby union in England. Its CEO, Mark McCafferty, has publicly rejected claims that Premiership operates as a cartel. He relies on the fact that English rugby union utilises a system of promotion and relegation for determining which teams compete amongst the professional elite. That being the case, the PRL, which is made up of representatives of each of the Premiership teams, together with the sport’s governing body, the Rugby Football Union (the RFU), may have found ways to create a cartel by stealth.
There is currently an ongoing dispute between academic staff and employers in the UK pre-92 Universities regarding the running of the USS pension scheme. I don’t want to get into the debate surrounding the reasons for the dispute, but an interesting competition law question has arisen regarding several UK Universities’ near identical responses to the fact the trade union that represents academic staff, the UCU, have announced a collective marking boycott as part of industrial action protesting at proposed changes to the pension scheme.
Two recent judgments handed down by the CJEU show how difficult it can be for a Member State to involve itself in fixing minimum prices for products. Given the ongoing challenge to minimum alcohol pricing in Scotland it is interesting that in both these cases the Court ruled against the fixing of prices, but for very different reasons. Neither case is directly analogous to the Scots alcohol MUP referred to the Court in Case C-333/14, but there are perhaps lessons that can be learnt.
The mainstream UK news media has today been gleefully reporting the large fines imposed by the Bundeskartellamt in the German Sausage cartel. What struck me as interesting is why that cartel, above so many others has broken out of the financial press and made the headlines?
Prof Cosmo Graham, from the University of Leicester, just posed me that very interesting question.
The #OpCotton ruling yesterday stayed a large City fraud prosecution because the defendants could not find Counsel willing to represent them at the reduced VHCC (Very High Cost Cases) rates now offered in Legal Aid cases. Many, see for instance David Allen Green in the FT and Alan Wagner in the New Statesman, have pointed out this may mean that VHCC cases are effectively unprosecutable in the UK. I don’t know if a Cartel Offence prosecution would normally fall into this VHCC class.
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 …