Individual Fines Should Not Be Imposed

1158 WordsMay 11, 20175 Pages
Individual Fines Individual fines can be imposed on the individual agents who actually engaged in the anticompetitive conduct, perhaps through a cap imposed on their annual benefits so there is some form of individual accountability. This however is likely to have the most insignificant deterrent effect out of all forms of individual sanctions. When individual fines are imposed there is always a possibility of indemnification, ultimately taking away from the deterrent effect. A company may compensate the individual in advance of the breach once they have weighted the risk against the cost, or alternatively they may indemnify them ex post once the infringement has actually taken place. With imprisonment for example, there is no…show more content…
When first introduced, it was envisaged there would be ten prosecutions per year – in practice, individual sanctions have played a very limited role, with the deterrent effect on cartel offences being consequently weaker than intended. Criminal sanctions carry a notion of immorality which individual directors fear. Social condemnation and the moral stigma attached to the criminal sanction of imprisonment enhances its deterrent effect - prison sentences for business persons is far more newsworthy than fines, thus acquiring more publicity, sending a stronger more public message to other individuals. If the harm and moral wrongfulness of the cartel conduct can be more widely be understood, more people may refrain from participating. Even if not systematically imposed, threat of imprisonment itself could be enough to increase compliance and add to deterrence. Significant deterrence could be achieved through criminal sanctions but could lead to disproportionate penalties being levied, as well as the risk of double jeopardy for individuals involved where the undertaking has already been fined. Where anticompetitive behaviour may not warrant punishment as extreme as imprisonment, disqualification may be more appropriate. Director Disqualification Under the Enterprise Act 2002, the CMA has the power to seek a disqualification order against a person if the undertaking of which they are director is found to be in breach of competition law,
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