CMA secures further director disqualification in an increased focus on individual responsibility for competition breaches
The CMA can prohibit directors from having any involvement in the management of any company for up to 15 years. These tools are now a key part of CMA enforcement.
On 4 March 2020, the CMA announced that it had secured a director disqualification undertaking from a director in connection with a breach of competition law by a pharmaceutical company (see here). As part of this undertaking, the director has agreed not to act as a director of any UK company for a period of 7 years.
The consequences of disqualification orders are significant and effectively mean that the individual cannot be involved with the management of a UK company in any way. There are significant consequences for breaching a disqualification order/undertaking, including criminal penalties. While these powers have been available to the CMA (or its predecessor the OFT) since 2003, they were only used for the first time in December 2016. There has been a significant acceleration in the use of these powers recently, with 10 of the 13 orders/undertakings to date having been issued in 2019.
The increased number of disqualification orders/undertakings also reflects the CMA's focus on "individual responsibility" for competition law infringements. There has been a significant acceleration in the use of disqualification orders/undertakings recently, with 10 of the 13 orders/undertakings to date having been issued in 2019. This fits with aspects of the proposals made by Lord Tyrie (the CMA Chair) published in February 2019 (here). In that letter, the CMA suggested that personal responsibility could be "further bolstered" if the CMA were also able to impose fines directly on individuals for serious competition law infringements. Although, it noted that this would be a significant change and that a "good deal of further work" would be required to assess the merits of such a change.