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| 1 minute read

Latest CMA director disqualifications highlight key competition compliance issues

The Competition and Markets Authority (CMA) has (in its own words) been ramping up its use of its director disqualification powers over the last few years. 

In early March, it announced that it had secured the disqualification of 3 directors from the two of the UK's largest suppliers (BLM and ALM) of rolled lead, which is used in roofing.  This followed an infringement decision finding that the companies had formed a cartel and infringed competition law by colluding on prices, arranging not to target certain customers, and arranging not to supply a new business because it risked disrupting the firms’ existing customer relationships.  

Reading through the materials, I was struck by how closely some of the issues raised by the CMA match points that we always raise in competition compliance training sessions:

  • The BLM director had sought to conceal his communications with ALM by using a second mobile phone which he originally claimed was his personal phone.  It was seized by the CMA in a second round of inspections, a useful demonstration that attempting to conceal communications is unlikely to succeed. 
  • One of the ALM directors was disqualified despite not actively engaging in any anti-competitive behaviour himself.  He suspected that ALM was breaching competition law and received competitively-sensitive information from a competitor, and, crucially, did nothing to stop it.  That he has now been disqualified from being a director for 3 years, with all of the consequences that entails for his career, illustrates the dangers of failing to act. 
  • The CMA increased each company's fine by 15% due to the involvement of senior management in the infringement (see the decision, 6.37).  As the fines in this case amounted to some £9.5m, a 15% increase is significant.

However, there are limits to the extent that compliance training will help prevent infringements. In this case, the CMA inferred that the BLM director may have started to use his second phone to conceal his communications following a training course which reminded him of the potential consequences.  Whilst somewhat ironic, and clearly not the intended goal of that training, it does show the wider importance of individual responsibility and company culture in producing a successful compliance programme.

Mr Campbell will be disqualified for 6.5 years, Mr Hudson for 4 years and Mr Sherling for 3 years.


competition law