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08 February 2017

CMA blogs about the importance of competition law

The Competition & Markets Authority ("CMA") has published a blog post written by Andrea Coscelli, the Acting Chief Executive of the CMA on the importance of competition law and enforcement. The CMA came into existence in April 2014 and the blog summarises the CMA's work on enforcement since its establishment.

Fines

During 2016, the CMA issued a total of £142million in fines, including a record breaking fine of £90million against the pharmaceutical companies Pfizer and Flynn Pharma who were found to be charging disproportionate and unfair prices for an anti-epilepsy drug. As well as imposing this fine, the CMA also ordered the companies to lower the prices they charge for this drug. Additionally during 2016, GSK (as well as other companies) were fined £37million for paying other companies to delay their entry into the UK paroxetine market and therefore potentially distorting competition. In both these cases, the NHS, which has been adversely affected by these breaches of competition law, can use the CMA decision to seek damages from the companies.

The CMA also reports that successful action has been taken against modelling agencies, online poster sellers and companies which supply bathroom fittings, catering equipment and steel tanks. The range of illegal behaviour that was punished included price fixing arrangements, market sharing and suppliers preventing online retailers from cutting prices by threatening not to supply goods.

Director Disqualification

Fines are not the only enforcement tool at the CMA's disposal. The CMA is also able to secure the disqualification of company directors for up to five years. In fact, in 2016 the CMA managed to ensure a director who admitted taking part in a price fixing scheme was disqualified for five years.

Prevention is better than cure

The CMA is keen to point out that decisions on enforcement are only taken after considered and careful review of the evidence and that, as well as punishing wrongdoing, these powers are useful as a powerful deterrent. The CMA considers that many companies are not as well versed in competition law as they should be and so, in an attempt to boost compliance, has produced a range or materials to explain the law to businesses. These materials can be found through the CMA's website.

Going forward

The CMA currently has 16 competition and consumer enforcement cases open, including investigations into the terms and conditions used by the online secondary ticketing market and online gambling firms. Through this enforcement action, the CMA states that it hopes to set a precedent for consumers and companies alike, assuring the former that their interests will be protected and the latter that any breaches will be tackled robustly.


This article was written by Olivia Mackie. For more information, please contact Olivia on +44 (0)20 7427 1040 or olivia.mackie@crsblaw.com.

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