The OFT has published new guidance to assist company directors understand their responsibilities under competition law. Company directors have an important role in ensuring compliance and face personal penalties. The Guidelines explain that if their company infringes competition law and a court considers that the director’s conduct makes him or her unfit to manage a company it can issue a Competition Disqualification Order (CDO) which disqualifies that person from being a director of any company for a period of up to 15 years. The Guidelines go on to explain the competition law risks that directors should be aware of and the action which directors can take to minimise the risk that their companies infringe competition law. The OFT recognises that not all directors have specific competition law expertise but believes that they ought to have sufficient understanding of the principles to recognise risks and to know when to instigate enquires or take legal action. The OFT takes the view that all directors ought to know that cartel activity (e.g. agreements with competitors to fix prices, share customers or markets, rig bids or limit production) will constitute a serious infringement. In other areas, a director’s personal liability will be judged against their actual or expected knowledge. For instance, a director with responsibility for commercial contracts and strategy is expected to understand the potential risks associated with commercial arrangements and to identify whether the company may have a dominant position in markets in which it operates and to avoid abuses of that position.
For a link to the OFT’s Guidance for companies and for directors click here