Birmingham businessman investigated by the FBI banned as company director
THE managing director of an online retailer in Birmingham which collapsed into administration in the wake of an FBI price-fixing investigation has been disqualified from being a director for five years.
Daniel Aston, managing director of the online poster supplier Trod Ltd is the first director ever disqualified by the Competition and Markets Authority (CMA) for infringing competition law.
The CMA may, under the Company Directors Disqualification Act, seek the disqualification of an individual from holding company directorships where that individual has been director of a company which has breached competition law.
This is the first time the power has been used for competition law breaches since it came on the statute book.
The disqualification follows the CMA’s ruling in August that Trod breached competition law by agreeing with one of its competing online sellers that they would not undercut each other’s prices for posters and frames sold on Amazon’s UK website.
The CMA found that the agreement was implemented using automated re-pricing software.
The CMA fined Trod £163,371.
As Mr Aston was the managing director of Trod at the relevant time, and because he personally contributed to the breach of competition law, the CMA said his actions made him unfit to be a company director.
Michael Grenfell, Executive Director for Enforcement at the CMA, said: “Breaking competition law can harm consumers, businesses and overall economic performance. In this case, people shopping online were entitled to believe retailers were competing on price, whereas, unknown to them, the companies had colluded not to undercut each other’s prices.
“The responsibility to ensure that companies don’t engage in illegal anti-competitive practices is an important one, and company directors should not shirk that responsibility. The business community should be clear that the CMA will continue to look at the conduct of directors of companies that have broken competition law, and, where appropriate, we are absolutely prepared to use this this power again.”
Under the Company Directors Disqualification Act, the CMA has the power to apply to the court for an order disqualifying a director from holding company directorships or performing certain roles in relation to a company for a specified period if a company of which he or she is a director has breached competition law.
The Act also allows the CMA to accept a disqualification undertaking from a director instead of bringing proceedings. A disqualification undertaking has the same legal effect as a disqualification order.
Trod, together with competing online retailer, GB, sold licensed sport and entertainment merchandise and related products, including posters, frames, badges, stickers and mugs, with popular images from the sport and entertainment world, such as One Direction and Justin Bieber.
Rubery-based Trod was raided by West Midlands Police in December last year as part of a US Department of Justice investigation into price-fixing of poster sales on Amazon Marketplace.
