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New UK Competition Watchdog Loses First Cartel Trial; Vows to Remain Vigilant

We previously noted that the UK’s new competition regulator, the Competition and Markets Authority, has indicated that cartel enforcement will be one of its top priorities, hoping to “open as many new criminal cartel investigations as possible” in 2015-2016.  However, the agency announced this week that its first trial in this area, concerning cartel conduct in the market for galvanized steel water storage tanks, has resulted in an acquittal.

The two individual defendants, former directors of Kondea Water Supplies Ltd. and Galglass Ltd., had been charged with participating in a scheme to “divide customers, fix prices and rig bids.”  Their trial followed a guilty plea by an executive at Franklin Hodge Industries Ltd. in connection with the same scheme.

The jury found that the CMA had not proved that the defendants acted “dishonestly.”  But the CMA is quick to point out that, following a recent change in the law, “dishonesty” is no longer an element of the criminal cartel offense.  (The defendants were charged under the previous version.)

The CMA therefore warns “anyone involved in cartel conduct or who may be tempted to become involved in such behaviour” that it remains “committed to investigating and prosecuting individuals who take part in cartels.”