On Tuesday 10 April, the UK competition regulator, the Competition and Markets Authority (CMA) announced that it secured the disqualification of two directors of the Abbott and Frost Estate Agents Ltd in Burnham-on-Sea for breaching competition law.
The disqualification follows the investigation into anti-competitive agreements between six real estate agents, who agreed the minimum price of 1.5% commission for residential property sales. This culminated in a fine of £370,084 being imposed in May last year. Only leniency applicant Annagram Estates, which operates under the name CJ Hole, escaped liability for the fine.
As part of its enforcement powers, the CMA can compel the disqualification of individuals from acting as directors of any UK company for a period of up to 15 years. In this case, David Baker and Julian Frost were disqualified for a period of three-and-a-half and three years respectively, in recognition of their active involvement in the anti-competitive agreement.
This is now the second time the CMA has used its power to disqualify a director. On 1 December 2016, the CMA secured the disqualification of Daniel Aston, the managing director of online poster supplier Trod Ltd, who agreed with his competitor that they would not undercut each other's prices for goods sold on Amazon. This second disqualification may suggest an emerging trend for the CMA towards tougher enforcement against individuals who breach competition law rules. Indeed, Michael Grenfell, the executive director for enforcement at the CMA, said: "Company directors have an important responsibility to ensure that their companies don't engage in illegal anti-competitive practices" and that ".today's news should send a clear message to directors that if their companies breach competition law they risk personal disqualification".
Those in the estate agents industry should also be mindful of competition compliance within their organisation, as the CMA is taking a particular interest in the sector. Just last month, the UK regulator opened a new investigation into the residential real estate sector on the back of information uncovered during the Burnham-on-Sea investigation.
If you have any questions or concerns about the issues mentioned above, please do not hesitate to contact us.
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This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.