On 30 November, Ireland’s Central Criminal Court imposed its first custodial sentence on an individual for involvement in a cartel. This prison sentence was imposed for non-payment of a criminal fine and is a stark reminder that involvement in cartels and other hard-core anticompetitive conduct exposes individual executives to the risk of imprisonment. In a growing number of jurisdictions worldwide, antitrust violations are punished criminally with fines and jail time.
Citroën dealership cartel
In 2007, following an investigation by the Irish Competition Authority into the activities of the Citroën Dealers Association, the Director of Public Prosecutions brought criminal charges against 14 of the association’s members. One of them James Bursey, a director of Bursey Peppard Motors Limited, who at various times was treasurer and president of the association. The Competition Authority found that, for a period spanning more than 10 years, members of the association had conspired to fix the price of Citroën cars sold in dealerships throughout Ireland.
In April 2009, James Bursey was convicted and given a 15-month prison sentence, suspended for five years, and fined €80,000 for his involvement in the cartel. His Citroën dealership was fined an additional €80,000. While the court issued suspended sentences to a number of individuals, no one actually was imprisoned for involvement in the cartel. However, Jim Bursey failed to pay his fine by the deadline set by the court, and therefore he was sentenced to 28 days in prison for non-payment of that fine.
Imprisonment is a growing risk, although not a universal one
James Bursey was jailed for non-payment of a criminal cartel fine, rather than for his actual involvement in a cartel. Nevertheless, individuals who participate in cartels are at an ever-increasing risk of imprisonment in a number of jurisdictions worldwide for their participation in cartel activities.
In Ireland, cartels were first criminalized in 1996, and courts can impose prison sentences of up to 5 years and fines of up to €4 million. This case may be the first tentative step by the Irish courts towards imprisoning individuals for cartel involvement.
In other countries imprisonment already is a very real risk. The United States has led the way in locking up executives convicted of fixing prices and other hard-core anticompetitive conduct. Prison sentences for cartel behaviour are in the U.S. an established and everyday deterrent. In 2007 alone, defendants in cases brought by the U.S. Department of Justice (DOJ) were sentenced to an aggregate 86 years in jail. Cartelists face a maximum of 10 years in jail and/or a $1 million fine in the U.S.
In the UK, individuals have only been criminally liable for cartel activity since the Enterprise Act 2002 introduced the 'cartel offence', for which a cartelist may face up to 5 years in prison and an unlimited fine. The UK saw its first prison sentences imposed on members of a cartel in 2008, when three individuals were sentenced to between two and a half and three years in prison for their involvement in the global marine hose cartel. The individuals in question were arrested in the United States following a cartel meeting that was covertly recorded by U.S. authorities. They were allowed to return to the UK as part of a plea agreement with the DOJ, which saw them plead guilty to cartel behavior on their return. With the prosecution of four British Airways executives pending for their alleged involvement in a fuel surcharge price-fixing agreement, there is a real prospect of yet more custodial sentences in the UK.
Custodial sentences also have been imposed on cartelists in other countries, including Canada and Israel, and there is the risk of imprisonment in a number of other countries, such as Austria, Brazil, France, India, Japan, Korea, and Russia. Nevertheless, criminal liability for cartel conduct is not yet universal. There is no criminal sanction under EU law, and even large economies such as China and Germany generally do not impose prison sentences on cartelists. This does not protect the cartelist from imprisonment anywhere: where the effects of a cartel cross national borders, cartelists may find themselves subject to extradition and prosecution in a jurisdiction where cartel conduct is punished with jail time.