Changes to UK Competition Law Result in New Penalties

A number of changes in the UK competition regime came into effect from 1 April 2014. The Competition and Markets Authority (CMA) replaced the Office of Fair Trading and the Competition Commission as the single authority responsible for the application of merger control legislation in the UK. Other significant changes include procedural updates to the UK merger control system and amendments to the criminal cartel offence.

The new regime increases competition enforcement in the UK. Prior to changes, which apply only to activities occurring after 1 April 2014, an offence was considered to be committed when an individual dishonestly agreed with other individual(s) to implement certain activities under the Enterprise Act 2002, related to price-fixing, limitation of supply, etc. Now that the dishonesty element is omitted, any arrangement that falls within the definition of such activities is illegal. Any individual, including company directors and employees, should bear in mind that prosecutors no longer have to prove the presence of dishonest behavior in the actions of an individual. This change increases risk of prosecution.

Companies should review their competition compliance policies and make sure that their management bodies and employees are aware of competition regime regulations. For example, the CMA will now have the power to fine a party in case it fails to provide information and documents throughout all stages of the investigation without a reasonable excuse, as requested by the CMA. Amount of fines will be determined by the CMA, which may be either a daily penalty up to £15,000 or a one-off payment up to £30,000. Such fines can be applied against the main parties under investigation and third parties, such as competitors, suppliers and customers.