In October 2019, the Competition and Markets Authority ("CMA") imposed fines totalling £36 million on three Northern Irish concrete producers, including FP McCann ("FPM"), for participating in a cartel in relation to the supply of concrete drainage products between July 2006 and March 2013 (see our summary). On 22 December 2020, the Competition Appeal Tribunal ("CAT") gave judgment dismissing FPM's appeal against its £25.4 million fine.
| what you need to know - key takeways |
- The CMA has considerable discretion over the way it manages antitrust investigations, and is not required to run criminal and civil cases in parallel. It will be difficult to demonstrate that an investigation was subject to inordinate or inexcusable delay as would warrant a reduction in fines.
- In the UK, cartel conduct such as price fixing and market sharing can result in heavy fines for the companies involved, as well as director disqualification and criminal penalties for individuals.
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In particular, the CAT held that FPM's fine had not been inflated by unreasonable delays in the CMA's criminal and civil investigations, which took a total of 79 months between the first arrests in March 2013, and the civil infringement decision in October 2019. This meant that the cap applied to FPM's fine (10% of its turnover in the year preceding the decision) was higher than it might have been had the decision been taken earlier.
In relation to the criminal case, the CAT considered that four years and three months was not excessive for an investigation, to criminal standards, into a secret seven-year cartel involving nine suspects, over a hundred possible witnesses and a substantial volume of evidence. The CAT accepted that there are good reasons not to run criminal and civil cases in parallel, including the risk of contaminating evidence in the criminal case and the potential for important evidence for the civil case to emerge at trial. The CAT also found that the civil case, which took 28 months, was not unreasonably long.
The CAT agreed with FPM that the CMA should have applied a discount for FPM's compliance activities: although FPM denied the infringement, this was not evidence that FPM's senior personnel did not understand the compliance training they had received or did not intend to comply with competition law in the future. However, the size of the fine upheld by the CAT was ultimately unchanged from that imposed by the CMA because it was subject to the 10% cap.
Related proceedings against company directors
The CMA has ongoing director disqualification proceedings against two current directors of FPM in the Northern Ireland High Court, in which the directors challenged the CMA's finding that FPM had committed a breach of competition law, the "First Condition" for their disqualification. This aspect of the case was transferred to the CAT and stayed, pending determination of FPM's appeal, in which the directors were granted permission to intervene. However, in the course of the appeal it became clear that FPM did not dispute the CMA's finding of infringement, just the size of the fine. The CAT has therefore determined that the First Condition is satisfied and the disqualification case will now continue in the Northern Ireland High Court, which will determine whether the directors' conduct has made them unfit to be concerned in the management of a company, and the duration of any disqualification.
Other consequences of the precast concrete drainage products cartel include:
- in September 2017, conviction of Barry Cooper, CEO of Stanton Bonna Concrete, under the criminal cartel offence. Mr Cooper received a sentence of two years' imprisonment suspended for two years, a 6pm-6am curfew for six months and disqualification as a director for seven years (see our summary); and
- in April 2019, competition disqualification undertakings obtained from two former directors of CPM Group, for periods of seven and a half years and six and a half years respectively (see our summary).
