The Office of Fair Trading has announced that it is bringing the first ever criminal prosecutions for ‘cartel offences’ – more colloquially called price-fixing. Three Lincolnshire businessmen have been charged with offences under Section 188 of the Enterprise Act 2002, which makes it an offence for individuals dishonestly to agree that businesses will engage in certain types of cartel activity, namely price-fixing, limiting supply or production, market-sharing and bid-rigging.
The charges resulted from an international investigation involving the authorities of several countries including the USA, where such activities are routinely dealt with as criminal offences. The arrests were made in the USA and it is likely that at least part of the reason why criminal charges have been brought in the UK was that the alleged co-conspirators were charged under US criminal law.
The progress of this case is likely to create a ‘template’ for future prosecutions.
It is not widely appreciated that anti-competitive activities can lead to criminal charges being brought against the persons responsible as well as significant fines for the businesses involved.
Interestingly, the House of Lords recently refused an extradition request, made by the US Department of Justice, relating to a company director wanted for trial for price-fixing. The offence occurred before the passing of the Enterprise Act. Since price-fixing was not a criminal offence in the UK prior to that time, the request was refused.