CMA secures first disqualification of company director for breaching competition law

The Competition and Markets Authority (“CMA”) has secured the first disqualification of a company director found to have infringed competition law.

Under the Company Directors Disqualification Act 1986 (as amended by the Enterprise Act 2002), the CMA has the power to apply to the court for a disqualification order to be made against a director of a company for a maximum period of 15 years where the company of which he is a director has breached competition law and his conduct as a director makes him unfit to be concerned in the management of a company.

Earlier this year, Trod Ltd (“Trod”), an online poster supplier, and GB Eye Limited (“GB”) were found by the CMA to have implemented an illegal cartel (in breach of competition law) by agreeing they would not undercut each other’s prices for posters and frames sold on Amazon’s UK website. Trod was fined £163,371 for its participation in the cartel but GB did not receive a fine as it informed the CMA of the cartel in accordance with the CMA’s leniency policy and cooperated with the investigation. For further details on this case, please refer to our case update, available here.

Following the CMA’s earlier decision, Daniel Aston, managing director of Trod at the time the relevant offence was committed, has given a disqualification undertaking not to act as a director of any UK company for a period of 5 years. The CMA considers that he personally contributed to the competition law breach and that his conduct makes him unfit to be a company director for the specified period. The disqualification period is reduced from the 15 year maximum in order to account for Mr Aston’s conduct, including his willingness to give an undertaking prior to court proceedings being commenced.

This decision serves as a warning to company directors that their conduct in breaching competition law could lead to action taken against them personally for such breaches. Further details on this decision can be found in the CMA press release, available here.

Contact our experts for further advice

Gustaf Duhs, Maliha Carey

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