Newsletters Business Crime & Financial Services 8th Mar 2016

The CMA in 2016: sights set by senior lawyer

Sarah Cardell, CMA General Counsel, has issued a robust statement of the CMA’s intentions in 2016. Her speech, on 23rd February 2016 at the IBC UK Competition Law Conference, began with two markedly ambitious pledges – ‘increasing pace without compromising quality’ and ‘achieving the optimum mix of speed, impact and rigour.’

Mrs Cardell spoke of the CMA’s two 2015 civil cartel victories under 2 CA98: one case involving an association of estate and letting agents who had agreed to restrict the advertising of fees or discounts in a local paper; the other involving private consultant opthalmologists who had entered an anti-competitive pricing agreement. Both of those cases were settled following admissions from the parties. Mrs Cardell, however, was keen to stress that settlement would only result where the relevant evidential standard was met, and to ensure that ‘expedited processes do not come at the cost of robustness.’ The CMA’s approach was, and remains, not to settle for efficiency’s sake where a more aggressive stance is justified.

The speech cited a further 5 civil competition enforcement cases that are ongoing, of which ‘at least 3… are expected to be concluded in 2016.’ It may be difficult to characterise a throughput of 5 cases in two years as evidence, so far, of ‘speed, impact and rigour’ on the civil side. Mrs Cardell stressed, however, that enforcement was only one part of the CMA’s remit, alongside publishing guidance for businesses, and the use of advisory and warning letters ‘intended to encourage compliance with competition law.’

It was more difficult still for Mrs Cardell to appear hawkish on the criminal side of enforcement given the CMA’s beleaguered history of prosecuting criminal cartels. Her speech made reference to the now amended Criminal Cartel Offence under the Enterprise Act 2002; she also touted the ability of the CMA under the Company Directors Disqualification Act 1986 to seek disqualification orders against company directors whose anti-competitive conduct ‘makes them unfit to be involved in the management of the company.’ But the criminal highlight reel was short. Mrs Cardell spoke of one ongoing criminal case (involving the construction industry in the Midlands) and made cryptic reference to ‘a number of intelligence leads.’ She conceded that neither the Office of Fair Trading or the CMA had yet sought to disqualify a director for a breach of competition law.

If Mrs Cardell could not point to many victories on the criminal side, the approach of the CMA to criminal enforcement was nonetheless phrased in robust terms. Mrs Cardell reiterated the CMA’s commitment to enforcement of criminal cartels (echoing Stephen Blake’s published response to the galvanised steel tanks case in September last year.) The CMA, too, was to ‘remain committed to identifying cases where we think it would be appropriate’ to seek disqualification orders.

Mrs Cardell also made clear that the criminal sanctions wielded by the CMA were not limited to the cartel offence itself. She spoke of the statutory powers employed by the CMA to require parties under civil investigation to provide information, documents, or provide evidence as a witness, and of the criminal sanctions available for those who provide false or misleading information in the course of CA98 investigations. No examples of the use of these sanctions were provided, but the message was clear – ‘we take these offences very seriously and would expect businesses – and their advisers – to do the same.’

Mrs Cardell issued a similarly robust statement of intent in relation to the use of commitments to avoid findings of infringement or the use of penalties. The CMA was ‘unlikely to accept’ commitments involving secret cartels between competitors or where there had been ‘serious abuse of a dominant position.’ Moreover, the CMA had already ‘considered and rejected’ commitments offered by parties where the impact on deterrence was too great to justify the speed and efficiency that might result.

In the round, this was robust talk from a senior lawyer at an agency that has faced some criticism over its ‘speed, impact and rigour.’ Whether Mrs Cardell’s soundbites indicate a change in approach is unclear: but they do at least signal a forthright attitude towards enforcement in 2016.

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