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Competition Law

Analysis - debate - current awareness

26 JAN 2016

Bam! Pow! Clack!

John Cassels

Partner

Bam! Pow! Clack!
The UK's antitrust regulator (the Competition and Markets Authority) this week warned companies that 2016 would see a big step up in the scale and impact of its enforcement activity: that means more investigations, significantly bigger fines and more criminal prosecutions of executives.

Key themes for the year ahead are likely to include:

  • Public castigation: continued focus on high impact, consumer focused businesses. Sports equipment, OTC medicines, estate agency services, retail banking, and energy supply have all been investigated by the CMA. Businesses that have consumer resonance (and well-known brands) will continue to be very attractive targets.
  • Jail time: the UK cartel offence was widened to make criminal prosecutions easier. The CMA will be very keen to secure some early successful prosecutions of executives.
  • Litigation: there is now a very significant private antitrust enforcement environment in the UK (also Germany and the Netherlands). The law in the UK changed last year to allow more US-style class actions and what was a swell is now a large wave. Businesses are now much readier to use competition law arguments as leverage in commercial negotiations.
What does this mean for you and your business?

  • First step: understand your business' regulatory risks and decide what sort of business you wish to be. What are the risks in your sector, for your business and for you, and what is the business' risk appetite?
  • Then consider what you are doing today: is there a compliance policy/programme and training; who understands the areas and individuals who pose the greatest risk; do employment contracts and promotions/appraisal criteria incentivise unwanted risk-taking? What are your early warning systems within the business: for example, who is alerted when others in your sector are under investigation or when business units materially over or under perform?
  • Work out what needs to be done to match your business' risk profile with its risk appetite so that it is the business you want it to  be. That will include having an action plan for when things go wrong. 
If you would like to discuss these issues please do not hesitate to contact us.

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