In a stern reminder to business at large about the serious consequences of breaching Competition law, the UK’s anti-trust regulator, the Competition and Markets Authority (“CMA”), has published a “60-second” summary on “Competition law: information for accountants in practice”. The CMA has promoted this latest short-form guidance as a nudge to accountants as “trusted advisers” to business clients to include serious warnings about competition law within their advice more generally. This is seen as a key conduit into the business world to try and raise awareness about Competition law and to alert business leaders to the CMA’s seriousness when it comes to enforcing the law and the ramifications for companies if they fail to comply.
MAKING SURE BUSINESSES TAKE ACCOUNT OF COMPETITION LAW!
In particular, the CMA highlights in its leaflet research findings which revealed that 77% of business reported not having a good understanding of competition law. As a result, the CMA has targeted the accountancy profession as an effective channel through which to transmit the compliance message, emphasising in its summary guide how:
“As an accountant and trusted business adviser, you may find yourself well placed to put competition law on a client’s radar and encourage them to avoid the risks of breaking it”.
The CMA is telling advisers to help their clients recognise anti-competitive behaviour and to be aware of the potential penalties that can arise from an infringement – i.e. fines of up to 10% of global, group-wide turnover (and other consequences, such as un-enforceability of agreements, 15 year directors’ disqualification orders, civil claims for damages and even criminal sanctions, not to mention very serious reputational damage from the adverse publicity a public enforcement process will generate).
Most significantly, perhaps, the guide encourages advisers to probe their clients on the systems and procedures they have in place (if any) to identify and address competition law risks and, in particular, to establish whether or not these are appropriate to the “size and nature” of the business in question.
HOW ADVISERS ARE BEING EXPECTED TO SUPPORT THEIR CLIENTS – AND HOW WE CAN HELP!
The key role of an adviser in assisting their client with legal compliance is helping them to identify common risks and, in particular (as the CMA’s guide describes them) “red flags” hinting at possible breaches having taken place. Obviously, in such a situation, an adviser seeking (as is their duty) to act in their client’s best interests will encourage them to obtain expert legal advice on the extent of their potential risk and exposure and/or on what can be done to mitigate that risk. This may even extend to making a formal application to the CMA for immunity or leniency from fines and prosecution in exchange for “blowing the whistle” on serious, so-called “cartel”-type arrangements (notably, for instance, fixing prices or allocating markets between competitors) and providing information to the CMA to assist it in enforcing the law against their participants.
In order to provide this support proficiently, an adviser needs a ready understanding of competition law themselves, together with access to the legal training and support services that can assist their client in maintaining compliance and spotting potential problems before they ‘hatch’ into more threatening ‘beasts’.
This is where our specialist Competition law team comes in – we are equally adept at providing tailored compliance materials (including online training) and/or bespoke advice on specific risks of infringement and the best strategies for limiting financial, reputational and individual damage. Indeed, it is very much worth emphasising to business principals and decision-makers the fact that the CMA currently offers a reduction of up to 5% for companies subject to a financial penalty where they have a compliance programme in place.
Not to mention (more importantly!) that improved awareness and understanding of competition law risks greatly reduces the likelihood of infringement in the first place!