Our team: Alex Haffner
The UK Competition and Markets Authority (CMA) has arguably been one of the busier UK regulators during the Covid-19 pandemic. During the past week alone, it has issued three separate competition law infringement decisions with fines totalling £6.7 million. The first two were against musical instrument manufacturers and a retailer, each of whom were found to have participated in unlawful resale price maintenance (RPM) arrangements. However, it is the third case: Private Eye Care (Ophthalmologists)  which is the subject of this insight because of the focus of the CMA’s fire on individual business people.
In 2015, the CMA imposed a fine on CESP Limited, a membership organisation of private consultant ophthalmologists, of £500,000, later reduced to £382,500. CESP was found to have (amongst other practices):
Just a few years later, the CMA became aware (to its great irritation) from a whistle-blower that Spire Healthcare and a grouping of 7 consultant ophthalmologists had, following a dinner meeting amongst them, shared correspondence which suggested that the agreed price for initial consultations for self-pay patients be set at £200 going forward. The ophthalmologists confirmed they would charge this fee, with 4 of them raising their prices from £180 to £200. The remaining 3 were already charging £200 and continued to charge this amount. Spire then liaised with its customer service team to facilitate the arrangement.
This case was a “textbook” example of unlawful information exchange involving competitors, with Spire Healthcare at the centre as a facilitator. It follows in a long line of cases where the competition authorities have taken a strict line against the exchange of forward-looking pricing data. Once such data is exchanged, the authorities’ view is that such exchanges will be unlawful, irrespective of whether those exchanging the data actually change their pricing/competitive behaviour as a result.
The inevitability of the CMA’s conclusions in this case was evidenced by the fact that all those involved in the investigation accepted culpability in order to receive a reduction in fines for “settlement” (apart from the whistle-blower who obtained immunity).
More relevant and pertinent, however, in the current climate was the CMA’s willingness to fine each of the individual consultants involved (as well as Spire).
Competition law applies to any “undertaking”, being, in overview, any person who carries out an economic activity. This means that both legal and natural persons (ie individuals) can be caught by the rules.
In the vast majority of infringement cases it is companies who are in the firing line. The CMA’s ophthalmologist decision is therefore a rare instance of individuals being fined directly for infringing behaviour.
This, together with the CMA’s increasing willingness to use their powers to impose “director disqualification orders” on directors of companies found to have breached the rules, as well as the criminal cartel offence for certain types of competition law infringements, means it has never been more important for business people to know exactly where the boundaries between lawful competitive behaviour and behaviour which crosses the line to infringement lies.