Section 47: Cartel offence
356.Section 47 amends section 188 by removing the requirement that an individual must be acting dishonestly. It then omits subsection (6) of section 188. This section introduces new disclosure provisions for all of the four categories of prohibited cartel activity compliance with which will take a person outside the criminal offence, and which in the case of bid-rigging largely replicate the effect of subsection (6).
357.A new section 188A sets out the circumstances in which the cartel offence is not committed. It provides that a person does not commit the cartel offence if, in the case of arrangements affecting the supply of a product or service, the customers would be given ‘relevant information’ before supply is agreed; or, in the case of bid-rigging, the person requesting bids would be given ‘relevant information’ before the time when a bid was made; or, in any case, ‘relevant information’ about the arrangements would be published before the arrangements were implemented in a manner specified in an order made by the Secretary of State. It would be for the prosecution to prove that these circumstances do not apply in relation to the arrangements.
358.Subsection (2) of the new section 188A defines ‘relevant information’. It is the names of the undertakings to which the arrangements relate, a description of the nature of the arrangements and the products or services to which they relate, and such other information as may be specified in an order made by the Secretary of State.
359.Subsections (3) and (4) of the new section 188A provide that an individual also does not commit the cartel offence when the agreement is made in order to comply with a legal requirement. A legal requirement in this context (and in relation to the exclusion from the Chapter 1 and Chapter 2 prohibitions in the CA 1998) means one imposed by or under an enactment in force in the UK, or by or under the TFEU or the European Economic Area Agreement and having effect in the UK without further enactment, or imposed by or under the law in force in another Member State and having legal effect in the UK.
360.Subsections (5) and (6) of the new section 188A make provision for the Secretary of State’s order-making power in subsection (2)(c). The power is exercisable by statutory instrument subject to the negative resolution procedure. It may be exercised so as to make different provision for different cases or different purposes, and may make such incidental, transitory, transitional or saving provision as the Secretary of State considers appropriate.
361.The new section 188B provides defences to commission of the cartel offence. An individual will have a defence where he or she can show that (1) at the time of making the agreement he or she did not intend that the nature of the arrangements would be concealed from customers at all times before they enter into agreements for the supply to them of the product or service; or (2) at the time of making the agreement he or she did not intend that the nature of the arrangements would be concealed from the CMA; or (3) before making the agreement he or she took reasonable steps to ensure the nature of the arrangements would be disclosed to professional legal advisers for the purposes of obtaining advice about them before their making or their implementation.
362.The new section 190A requires the CMA to prepare and publish (in such manner as it considers appropriate) guidance on the principles to be applied in determining, in any case, whether proceedings for an offence under section 188(1) should be instituted. In preparing the guidance the CMA is required to consult the Director of the Serious Fraud Office, the Lord Advocate and such other persons as it considers appropriate.
363.Subsection (8) of section 47 makes transitional provision for agreements effective before the coming into force of the new section. It provides that the amendments made by subsections (1) to (6) of the section only apply to agreements falling within section 188(1) which are made after the commencement of the new section and which relate to arrangements made or to be made afterwards. This means that existing agreements and those made before commencement will continue to be subject to the cartel offence as currently enacted. Agreements made after commencement which relate to arrangements made before commencement will also continue to be subject to the current law.