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CAT rules on significant penalty appeal


The CAT today handed down judgment in Roland (UK) Ltd v CMA in which it ruled for the first time on the CMA's settlement policy in the context of a penalty appeal.

Roland appealed against the CMA’s decision to impose a penalty of just over £4 million for resale price maintenance (“RPM”). Roland originally settled with the CMA, admitting both the infringement and the maximum amount of the penalty.  

Roland argued that the Tribunal should reduce the penalty on two grounds: first, that the CMA had overstated the seriousness of RPM; and, secondly, that the 20% reduction in penalty given by the CMA pursuant to the leniency programme was inadequate.

The Tribunal dismissed both grounds of appeal. The Tribunal agreed with the CMA that RPM is a serious “by object” infringement of the competition rules that needs to be deterred in the UK. The Tribunal also held that it was reasonable for the CMA to set the leniency discount at 20%. 

In addition, the Tribunal granted the CMA's application to increase the fine by revoking the 20% discount that the CMA applied to Roland's penalty for settlement.  In signing a settlement agreement, Roland had agreed to the £4 million penalty imposed by the CMA.  It was in return for that agreement that the CMA had rewarded Roland by reducing the fine by 20%.  As Roland had resiled from its agreement, the Tribunal held that it was appropriate to revoke the settlement discount and increased the fine to just over £5 million.

The judgment is here.

Daniel Piccinin appeared for Roland (UK) Ltd and Roland Corp, instructed by Simmons & Simmons LLP.

Marie Demetriou QC and David Bailey (who argued the second ground of appeal) appeared for the CMA, instructed by CMA Legal.