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Case law: Director disqualified for breach of UK competition law for first time

Companies should ensure they are aware of, and avoid infringing UK competition law, or risk the Competition and Markets Authority applying to disqualify their directors from acting as a director for up to 15 years.

Legal Alert

This update was published in Legal Alert - January 2017

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

Two relatively small businesses sold posters and frames online. They agreed not to undercut each other’s prices on Amazon UK, however, in the circumstances this was a breach of UK competition law. The managing director of one of the businesses personally contributed to the breach.

If a UK company has breached competition law the Competition and Markets Authority (CMA) has power to apply to disqualify any directors involved for a maximum of 15 years, or accept an undertaking from them not to act as a director — but this power has never been exercised before.

However, the CMA used its powers for the first time in this case. It accepted an undertaking from the managing director that he would not act as a director of his, or any other UK company, or in any way (whether directly or indirectly) be concerned or take part in the promotion, formation or management of a UK company, for five years.

Operative date

  • Now

Recommendation

  • Companies should ensure their staff are aware of, and avoid infringing the provisions of UK competition law — or risk their directors being disqualified from acting as a director for up to 15 years

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.