The Office of Fair Trading (OFT) have published revised guidance on competition disqualification orders (CDOs) and with it, a warning that it intends to “actively seek disqualification of directors found to have engaged in anti-competitive behaviour or who ought to have known it was going on”
It is therefore clear that directors must retain a good grasp of competition law and ensure that their company has adequate policies and procedures in place to prevent it from falling foul of UK and EU competition law.
The guidance makes it clear that ignorance is not an excuse and the OFT will be just as concerned with directors who ought to have known of competition law breaches as those whose conduct contributed to the breach. In considering whether a director “ought to have known” of the breach, the OFT is likely to take into account:
- The director’s role in the company;
- The relationship of the director’s role to those responsible for the breach;
- The general knowledge, skill and experience possessed by the director and that which a director in his position should possess; and/or
- The information available to the director.
The guidance enables the OFT to accept undertakings in place of disqualification and to give immunity where a director co-operates with an OFT investigation.
The OFT has indicated that the changes are not intended to place a higher burden on particular directors but, given that the role of the director will be taken into account, it seems that directors with compliance responsibilities and those involved in sales, distribution and marketing (who naturally are more likely to be aware of anti-competitive practices) will be in a more vulnerable position.
It is acknowledged that directors are not expected to be experts in competition law and the OFT have promised to publish some guidance setting out what a director is expected to know. In the meantime, if a director is concerned that practices within their business may be anti-competitive, specialist advice should be obtained.