European Competition Law Newsletter – October 2015

by McGuireWoods LLP

Prison Sentence in the UK for Cartel Activity

On 14 September 2015, an individual (Nigel Snee) was sentenced by a UK court to six months of imprisonment, suspended for 12 months, for committing the criminal “cartel offence”. He was also ordered to do 120 hours of community service within 12 months. If he does not carry out this service or is convicted of another offence during the suspension period, he is likely to serve the six months in jail in addition to any sentence for the new offence.

This is a semi-victory for the UK Competition and Markets Authority (CMA), which brought the case. A compliance message has been sent, but Snee pleaded guilty and the only other convictions under the cartel offence also came following guilty pleas.

Snee pleaded guilty to dishonestly agreeing with others to fix prices, divide up customers and rig bids between 2005 and 2012 in respect of the supply in the UK of galvanised steel tanks for water storage. He cooperated with the investigation and was a witness for the CMA at the subsequent trial of two further individuals, who were acquitted in June 2015 following not guilty pleas. That was the CMA’s first attempt at convincing a jury to convict individuals for the cartel offence. The jury was not persuaded that the two defendants acted “dishonestly” and therefore returned a unanimous not guilty verdict after only around 2 1/2 hours of deliberation.

In explaining the approach to sentencing in Snee’s case, the judge remarked that “the economic damage done by cartels is such that those involved must expect prison sentences”. That will be music to the CMA’s ears and will no doubt soon make an appearance in its compliance materials.

The case was brought under the law as it applied to conduct before April 2014. Under that law the cartel offence was committed only where the individuals concerned were dishonest. Following a change in the law, for conduct after 1 April 2014, it is no longer necessary for the CMA to prove individuals acted dishonestly to commit the cartel offence.

This change may, although it remains to be seen, result in more prosecutions under the cartel offence and maybe even a guilty verdict in due course. However, it is notable that the new law is subject to a number of exclusions and defences.

The CMA is conducting a related civil investigation into whether businesses have infringed the UK Competition Act 1998 by engaging in cartel activity concerning galvanised steel tanks, for which they could be fined.

New Practical Guidance from the European Commission on Dawn Raids

Competition law dawn raid manuals for the EU need to be updated following the publication by the European Commission (EC) of new practical guidance. This is an update of its “explanatory note”, last revised in 2013, which provides a detailed explanation of the EC’s procedures at competition law dawn raids.

The changes include specific references to EC officials being able to search servers, external hard disks, backup tapes and cloud services. Private devices and media that are used for professional reasons (“BYOD” or Bring Your Own Devices) are also specifically referred to as being searchable. There is also a new reminder that personal data may be seized as part of the raid since it may be contained in business documents. However, the EC does confirm that this will be used only for the purpose of the investigation against the company and will be processed in accordance with the EU data protection rules.

In addition to these points, the new guidance includes various specific comments as to how the search will be carried out. Personnel attending dawn raids in the EU also need to be aware of these changes, since significant fines can be imposed for failure to comply with the EC’s instructions during a raid.

How to Send a Price Increase Letter

It is well known that, particularly in concentrated markets, companies need to be very careful when making public price increase announcements, since this can lead to accusations of illegal price signalling. However, it is rare for an EU competition regulator to set out in exactly what form, and how, price increase letters should be used in order to avoid such concerns.

The UK CMA recently provided an example of such guidance. On 10 September 2015, the CMA set out the details of how it proposes to regulate price increase announcements by cement companies. This follows a market investigation into the industry, which amongst other things identified concerns about price signalling in the industry.

The draft order published by the CMA would completely prohibit generic price announcements (i.e., any notification that is not specific to an individual customer) and would require any price notification to a customer to include the following details:

  1. the customer’s name and relevant address;
  2. the effective date of any price change;
  3. the current or last unit price charged by the supplier to the customer;
  4. the new unit price being proposed; and
  5. details of any other changes that could affect the total amount payable.

Signalling can affect a number of industries and the issues raised and the solution in this case are therefore of wider interest.

New UK Private Competition Enforcement Regime Comes into Force

On 1 October 2015, significant new legislation affecting competition private actions in the UK entered into force. The rules are designed to make it easier for consumers and businesses (particularly SMEs) to gain access to redress through the courts where there has been an infringement of competition law.

Specifically, the new legislation widens the types of competition cases that the specialist Competition Appeal Tribunal (CAT) hears. The CAT will be able to grant injunctions, including under a new fast-track procedure. The legislation also provides for opt-out collective actions (“class actions”) and opt-out collective settlements as well as voluntary redress schemes.

The most high-profile changes are the new provisions for opt-out collective actions. These are class actions since they involve a case being brought forward on behalf of a group of claimants to obtain compensation for their losses. Cases would be able to be brought by representatives on behalf of individuals and/or businesses. Claimants would be automatically included into the action unless they “opt out” in a manner as decided by the CAT on a case by case basis.

There are various safeguards designed to ensure that these collective actions do not become U.S.-style class actions. For example, the CAT cannot award exemplary damages in collective proceedings, i.e., damages which are designed to be punitive rather than simply compensate for the actual loss suffered. This prohibition is expressly designed to avoid very large damages being awarded which do not reflect the losses suffered.

Despite the safeguards, inevitably claimant law firms in the UK are chomping at the bit to use the collective claim provisions. The first case will, however, probably be a test case to investigate the boundaries of issues such as funding of claims and how to define a suitable class.

More generally, it is inevitable that the changes being introduced will increase private competition litigation in the UK, which will have an impact on aggrieved and infringing parties alike. There is now even more reason to make sure that suitable competition compliance programmes are in place and used in practice.

Additional European competition law news coverage can be found in our news section.

U.S. Antitrust

We publish a newsletter and bulletins on U.S. antitrust developments, as well as regular publications on numerous other topics.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McGuireWoods LLP | Attorney Advertising

Written by:

McGuireWoods LLP

McGuireWoods LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.