Government competition law reform proposals cause outcry
City lawyers have expressed concern about proposals to remove “dishonesty” from cartel offences.
Last week, the government unveiled its final proposals for reform of the UK competition regime. They include merging the Competition Commission and the Office of Fair Trading into a new regulatory body, the Competition and Markets Authority, with powers to enforce both civil and criminal competition laws. However, a proposal to reform cartel laws is proving controversial.
Robert Bell, chairman of the City of London Law Society Competition Law Committee, says: “We have serious concerns about the proposal to remove the dishonesty element from the cartel offence (s 188, Enterprise Act 2002).
“In addition, the offence will not be made out if the parties have published details [of an agreement] before it is implemented.
“Enforcing the new offence is likely to be problematic. The government does say it will need to be subject to a required intent to enter into a cartel agreement, but it is not clear how this will be implemented. In addition, the removal of the dishonesty element will utterly transform the offence, lowering the bar to criminal prosecution and giving rise to potential injustices.”
Gustaf Duhs, head of competition at Stevens & Bolton, says: “Businesses will be required to publish agreements prior to implementation to avoid the potential for criminal prosecution. Past experience suggests that businesses will not voluntarily publish such agreements and, as a result, the risk of criminal prosecution (and up to five years’ imprisonment if convicted) will be much greater.”
