The UK criminal cartel offence

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The UK criminal cartel offence was created by the Enterprise Act 2002, with the intention of criminalising and deterring the most serious and damaging forms of anti-competitive agreements, known as "hard core cartels". These include agreements relating to price-fixing, the sharing of markets or customers, limiting production or supply, or bid-rigging. Significant sanctions, including a prison sentence of up to five years, were introduced for individuals found guilty of the offence. However, in practice the UK criminal cartel offence has thus far been rarely used, limiting the deterrent effect of the risk of criminal prosecution. Only one successful prosecution was brought between 2003 and 2012, against individuals involved in the Marine Hose cartel who pleaded guilty to the offence as part of a plea bargaining arrangement in the USA. A second, high profile prosecution against four British Airways executives collapsed in 2010. The competition authorities argued that the reason for the lack of prosecutions was that it was difficult to show that an individual had acted dishonestly, which was one of the requisite elements of the offence. In 2012, the Government therefore decided to remove the dishonesty requirement and thereby broaden the scope of the offence. The jury acquittals in 2015, under the old rules, of two executives involved in the Water Tanks cartel appeared to confirm the difficulties of convincing a jury that cartel participants acted dishonestly. A revised criminal cartel offence, which does not require dishonesty to be proven, was implemented by the Enterprise and Regulatory Reform Act 2013, and entered into force on 1 April 2014. The amendments to the offence were intended to increase the number of successful criminal prosecutions for involvement in cartel activity, and the Competition and Markets Authority ("CMA") has publicly stated that it intends to bring at least one prosecution each year under the new regime (while also continuing to apply the old rules where appropriate to conduct pre-dating 1 April 2014, as illustrated by the conviction in September 2017 (following a guilty plea) of one individual in relation to the Precast Concrete Drainage Products cartel). It is therefore very important to understand the scope of the revised offence and how to minimise the risk of prosecution. This Quickguide outlines the key elements of the offence, including the exclusions and defences, as well as practical guidance on how to minimise the risk of prosecution.