In May 2019, the CMA obtained competition disqualification undertakings (“CDUs”) from three individuals for involvement in a cartel relating to design, construction and fit out services. This follows new guidance in February this year on directors’ competition disqualification orders (“CDOs”). The new guidance is intended to make it easier for the CMA to secure director disqualification in competition cases, by simplifying the application procedure and creating greater incentives for directors to offer undertakings rather than face an application to Court. This can be seen as part of a broader desire to use sanctions against individuals to achieve deterrence, which is not limited to competition cases. Lord Tyrie, in a February 2019 letter to the Government,[1] called for more individual responsibility in competition law enforcement, and suggested that CDOs should also be extended to consumer enforcement.

Competition Disqualification Orders

The CMA has the power to apply to the Court for a CDO of up to 15 years.[2] The Court may grant a disqualification order if two criteria are satisfied: (1) the individual in question is a director (or shadow director) of a company that has infringed UK or EU competition law; and (2) their conduct renders them unfit to be concerned in the management of a company.[3] In practice, directors under investigation may avoid court proceedings by voluntarily entering into CDUs.

The CMA has previously highlighted the importance of individual sanctions as a way of enhancing compliance. Despite the CMA’s stated intention to increase the use of individual sanctions, however, CDOs and CDUs have historically been underused. This is because of the complexity of the procedure and the resultant difficulties for the CMA in bringing cases.

The New Guidance

In an effort to reduce this complexity, the CMA adopted updated guidance on the process to be followed when deciding whether to apply for CDOs on 6 February 2019 (the “New Guidance”). The New Guidance seeks to improve the efficiency of the investigation and decision-making process, through the following main reforms:

  • Introducing more flexibility to the CMA’s decision-making process, replacing the more prescriptive five-step test with a list of factors to be considered;
  • Streamlining the administrative process by removing the automatic right for directors to make oral representations;
  • Extending a director’s ability to benefit by cooperating with the CMA beyond formal leniency proceedings, allowing the CMA to reduce the length of the disqualification period for material cooperation that does not fall under the leniency programme; and

Providing that the length of a CDU will likely be shorter the earlier in the process it is offered.

The Latest CDUs and Emerging Trends

Since accepting CDUs from directors in relation to anti-competitive conduct in online sales of posters and estate agencies (in December 2016 and April 2018, respectively), the CMA has secured CDUs from five more directors in two further cases, and accepted an additional CDU in the estate agents case.

Date of undertaking and infringement Nature of infringement Length

1 December 2016

Online sales of posters and frames.

Price-fixing between March 2011 and July 2015 5 years

10 April 2018

Residential estate agency services in the Burnham-on-Sea area.

Price-fixing between Feb 2014 and March 2015

3 years

3.5 years

26 April 2019

Supply of products to the construction industry.

Price fixing, market sharing and information exchange from July 2006 to March 2013

6.5 years

7.5 years

30 April 2019

Residential estate agency services in the Burnham-on-Sea area.

Price-fixing between Feb 2014 and Feb 2015 5 years

10 May 2019

Design, construction and fit-out services.

Colluding on 12 tenders in November 2006 and between June 2011 and May 2016 5 years

Colluding on 2 tenders

(lasting 2 months and 4.5 months)

2.5 years

Colluding on 2 tenders

(lasting 3 months and 1 month)

2 years


As shown in the table above and the chart below, the CMA has obtained CDUs amounting to a total of 40 years in length since April 2016, with six individuals disqualified in the last two months alone. The average disqualification period is 4.4 years. The length of the disqualification periods relates to the length and severity of the conduct, although there are two instances in which the period was increased because the individuals failed to co-operate fully with the CMA’s investigation. In one of these cases, the CDU was only offered after the CMA had issued court proceedings. In the other, the director concerned would have benefited from immunity from disqualification (since his company was the immunity applicant), but this was forfeited when he refused to submit voluntarily to an interview requested by the CMA. Although it is unlikely that all of these CDUs were offered under the New Guidance (given its introduction only in February this year), the CMA is clearly increasing its use of its powers.

Competition Disqualification Undertakings Secured by CMA

Lord Tyrie’s Letter and the Future for Individual Responsibility

The CMA’s increased focus in this area was supported by proposals from the new chair of the CMA, Lord Tyrie, on 25 February 2019, in which he suggested that CDOs should be extended to apply also to serious consumer law breaches. According to the letter, the CMA is already developing this proposal, so it may not be long before we hear more.

Given the express reference to CDOs and the CMA’s increasing use of this power, this regime may act as the blueprint. The letter also raises concerns with the CDO approach, however, citing its ultimate reliance on the courts and its inapplicability to individuals below director level as weaknesses. That said, it seems difficult to sustain an objection to the involvement of the courts in circumstances where the CMA has now secured eight undertakings in two and a half years without resorting to the court. In only two instances has it applied for a court order and, in one of these cases, this elicited a CDU within two months (although the CDU was lengthier than for other directors involved in the same conduct). The director disqualification regime is broad and can apply in any instance where a company director is deemed ‘unfit’. For example, directors can be disqualified in the context of insolvency proceedings, and as of March 2019, there are over 6,600 former directors currently disqualified for misconduct connected to insolvency.

Lord Tyrie also proposed strengthening individual responsibility in competition infringements beyond director disqualification. He raised the prospect of fining individuals as well as companies, while recognising the need for further assessment of the proposal. In particular, he identified the difficulty in identifying individual responsibility without lengthy legal argument. In circumstances where company directors already see the threat of disqualification as a significant deterrent, second only to criminal enforcement,[4] it is possible that the benefit of any additional deterrent effect from imposing individual fines would be outweighed by delay to the investigative process and burden on the CMA’s resources.

This leads into Lord Tyrie’s final concern on individual responsibility: the limited availability and practical limitations of individual criminal responsibility for anti-competitive behaviour. He proposes that the CMA cede responsibility for criminal prosecutions to the Serious Fraud Office (“SFO”), which would allow the CMA to focus on civil enforcement and might increase the number of criminal prosecutions given the SFO’s greater familiarity with such proceedings. According to Lord Tyrie, this proposal “merits reconsideration,” suggesting that it is lower down the priority list than consumer enforcement, on which proposals are already being developed.


The CMA has increased its focus on individual responsibility. The court’s decision whether to order a CDO in the pending case where a CDU has not been agreed will provide an important precedent and will likely have a significant impact on the direction of travel of CDOs and CDUs. Success for the CMA would help to emphasise and publicise the role of director disqualification as a deterrent to individuals. But if the court does not award the CDO, it could well encourage directors threatened with disqualification proceedings to hold out from CDUs and force the CMA to try again before the court. Ultimately, this might well be the deciding factor in whether Lord Tyrie’s concern at the dependence of the CMA on the court to order CDOs results in reform to the CMA’s statutory powers. Either way, the enforcement focus on individual responsibility seems here to stay, with competition law leading the way for consumer law to follow.

[1]              Letter from Andrew Tyrie, CMA chair, to the Secretary of State for Business Energy and Industrial Strategy, 25 February 2019.

[2]              These powers originate from the Company Directors Disqualification Act 1986 (“CDDA”), as amended by the Enterprise Act 2002.

[3]              CDOs are also available in criminal cases. In the Marine Hose case, three directors were disqualified and imprisoned.

[4]              As referred to in our April 2018 edition, a 2007 report by Deloitte for the OFT found that directors disqualification was perceived as the second most important sanction available for competition law, behind only criminal penalties.