OFT to take on cartels
Company directors who conspire to keep prices artificially high could be caught out by the new Enterprise Act, which comes into force today.
The Office of Fair Trading – now an independent statutory body – will gain greater powers to clamp down on cartels and rogue traders under the new legislation.
The act contains several reforms that are designed to crack down on abuses that harm customers and fair-trading businesses alike, with the hope of encouraging greater competition and enterprise as well as protecting innocent parties.
Criminal penalties for the worst offences such as horizontal price fixing, limiting supply or production, market sharing and bid-rigging will be severe, with a maximum jail sentence of five years and an unlimited fine.
And to encourage whistleblowers, as is the case in the United States, immunity from prosecution can be granted to individuals who inform the OFT of a cartel and co-operate fully in the investigation.
The act also gives the OFT the power to have company directors disqualified if their company breaches competition law.
Other new powers include the ability to take decisions on whether or not mergers are anti-competitive, without cases first going through the hands of the Trade and Industry Secretary, and there will be a new fast-track consumer complaints procedures.
John Vickers, chair of the OFT, described the act as “a major milestone in the development of competition and consumer law”.
