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Company director banned for competition law breach

12/01/2017

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United Kingdom

The Competition and Markets Authority (CMA) has, for the first time, used its power to ban a director for breaches of competition law.

In August 2016 the CMA found that Trod Ltd and GB eye Ltd had entered into an anti-competitive arrangement for retail sales of licensed sport and entertainment posters and frames (including poster frames) which they both sold on Amazon UK, having agreed not to undercut each other on prices where there was no cheaper third party seller on Amazon UK. They had utilised automated software to implement the arrangement. Trod Ltd was fined £163, 271. In December, the CMA announced further action, this time against Mr Daniel Aston, who was Trod's managing director at the relevant time.

The CMA found that Mr Aston had personally contributed to the breach of competition law, and concluded that his conduct made him unfit to be a company director for a specified period. The CMA may, under the Company Directors Disqualification Act, seek the disqualification of an individual, either by court order or legally binding undertaking, from holding company directorships or performing certain roles in relation to a company for up to 15 years, where that individual has been director of a company which has breached competition law.

The CMA accepted an undertaking from Mr Aston not to act as a director of any UK company for five years. Like a formal disqualification order, the undertaking means that Mr Aston must not act as a director of any company registered in the UK or of any overseas company with UK connections such as running a business or having assets here, nor may he be involved in forming, marketing or running a company even if not appointed as a director.

Michael Grenfell, Executive Director for Enforcement at the CMA, said:

"The responsibility to ensure that companies don’t engage in illegal anti-competitive practices is an important one, and company directors should not shirk that responsibility. The business community should be clear that the CMA will continue to look at the conduct of directors of companies that have broken competition law, and, where appropriate, we are absolutely prepared to use this power again."