Precise

New Competition Law Has Real Teeth

Under the old law relating to cartels, it was necessary to prove dishonest intent in order to obtain a criminal conviction when companies engaged in price fixing, market manipulation, bid rigging and so on. The civil law provides that breaches of competition law can lead to a fine, but the criminal law also provides for a prison sentence to be given to those who flout the law.

The difficulty in obtaining criminal convictions (because of the need to prove dishonest intent) has meant that there has so far only been one successful criminal conviction under the old legislation, which has allowed serious cases of market manipulation to go unpunished under the criminal law. To remedy the situation, new legislation (the Enterprise and Regulatory Reform Act 2013) came into effect on 1 April 2014, under which it is no longer necessary for dishonest intent to be shown in order to obtain a criminal conviction.

In addition, the functions of the Office of Fair Trading and the Competition Commission have now passed to the Competition and Markets Authority.

The practical effects of the changes are that a wider range of offences against competition law could become criminalised and that (for example) joint ventures which contain 'non-competition' clauses might unexpectedly fall foul of the law.


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