More companies could find themselves falling foul of competition law as the recession worsens.
Speaking at yesterday’s ABTA Travel Law seminar in London, K&L Gates partner Neil Baylis said the current economic climate has seen the number of mergers and acquisitions dramatically decrease.
This has led to UK civil servants having more time on their hands to investigate other matters, meaning more companies may be discovered to have fallen foul of other laws, including competition law.
Baylis said: “In the current climate this is the last thing any one company needs to be dealing in.
“There’s more likelihood of cartels being investigated at the moment.”
The cost of falling foul of competition law is expensive, he added. In the last five years alone the European courts have levied €13 billion in fines from companies found guilty of creating cartels.
Baylis said there does not need to be any form of formal legal agreement evident for a company to be found guilty of infringing competition law while emails, phone calls and diary entries can all be used as evidence.
In order to successfully prove companies have set up a cartel, there needs to be evidence that those behind the cartel knew what they were doing was wrong, he explained.
Baylis also said should one company blow the whistle over a cartel it has created with another company, the whistle-blowing company is far more likely to escape with less punishment. This was demonstrated by the case concerning Virgin Atlantic and British Airways colluding on the cost of fuel surcharging on long haul flights from August 2004 to March 2006.
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