IB v R

A criminal cartel prosecution under Enterprise Act 2002 section 188 does not directly apply the EU rules determining whether agreements between undertakings infringe Articles 81 or 82 of the Treaty. It is therefore outside “national competition law” as that expression is used in Council Regulation (EC) No 1/2003.

The Regulation concerns decisions on the validity of agreements and direct enforcement of Articles 81 and 82. Its co-operation, designation and Commission call-in provisions do not remove the Crown Court’s jurisdiction to try the distinct domestic offence. In any event, those provisions do not make punishment for a national criminal offence the exclusive province of a designated competition authority.

The appellant, a senior executive of one of two companies, was charged with dishonestly agreeing to effect a price-fixing arrangement contrary to section 188 of the Enterprise Act 2002. The alleged arrangement was capable of affecting trade within the European Union.

At a preparatory hearing under section 29 of the Criminal Procedure and Investigations Act 1996, Owen J rejected the contention that Council Regulation (EC) No 1/2003 deprived the Crown Court of jurisdiction. The appellant brought this interlocutory appeal.

The central issue was whether the Regulation confined enforcement of an alleged section 188 cartel offence with an EU dimension to the Office of Fair Trading as the United Kingdom’s designated competition authority.

1. Appeal dismissed. Owen J was correct to hold that the Crown Court had jurisdiction to try the indictment under section 188 of the Enterprise Act 2002.

2. Section 188 criminalises an individual’s dishonest agreement to make or implement specified arrangements relating to undertakings. It was enacted to strengthen the domestic response to anti-competitive conduct, but that broad purpose did not determine its status under Council Regulation (EC) No 1/2003.

3. Properly construed as a whole, the Regulation is concerned with the direct application and enforcement of Treaty Articles 81 and 82. Its concern is with decisions whether an agreement infringes those Articles and is consequently valid or invalid. A prosecution under section 188 does not determine that question, although the legality of an arrangement may bear on a defendant’s state of mind.

4. Section 188 is consequently not “national competition law” in the relevant sense in Article 3 of the Regulation. It is an ancillary domestic criminal offence, rather than a means of directly enforcing competition rules against undertakings. The court approved the limited point in R v GG [2007] EWCA Crim 2659 that the Regulation does not govern a separate established criminal offence merely because it arises in a price-fixing context.

5. Further, even if section 188 were national competition law, Articles 3, 5 and 35 did not make criminal punishment exclusively a matter for a designated national competition authority. The designation and Commission call-in provisions concern the application of Articles 81 and 82, not the prosecution of a domestic offence which does not itself decide whether those Articles have been infringed.

• Court of Appeal (Criminal Division): dismissed the appellant’s interlocutory appeal and upheld Owen J’s preliminary ruling that the Crown Court had jurisdiction.
• Southwark Crown Court: at a preparatory hearing under section 29 of the Criminal Procedure and Investigations Act 1996, Owen J rejected the jurisdictional challenge.