Competition & Markets Authority’s New Cartel Campaign

Competition & Markets Authority’s New Cartel Campaign

The Competition and Markets Authority (“CMA”) has launched a new cartel awareness campaign aiming to educate businesses about illegal practices and urging people to come forward if they suspect illegal behaviour, such as ‘price fixing’ or ‘bid rigging’.

Research released by the CMA to coincide with the campaign shows that out of 1,000 companies surveyed:

• Only 57% know that it is illegal to fix prices;

• Nearly 50% think it’s okay to discuss prices with competing bidders when quoting for new work; and

• 24% don’t know that dividing up and sharing customers with rivals is illegal and 35% actually think it is legal.

The campaign is targeting industries including construction, manufacturing, recruitment, estate agents and property management/maintenance which have been identified as particularly susceptible to cartels.

The campaign is using simple imagery on various social media websites and uses a dedicated website (www.gov.uk/stopcartels).

Previous CMA campaigns have led to a 15% rise in the number of “tip-offs” to the CMA’s hotline and the CMA says that it is currently investigating 15 cases within the construction and estate agency sectors.

As an example, a group of Somerset estate agents were recently fined £370,000 for fixing the minimum commissions chargeable to local homeowners, thereby restricting competition in the market. The CMA has also secured the disqualification of two company directors in this case.

The lesson for local businesses is clear. Competition law is something for all businesses, large or small, to take note of. Get it wrong and your business can be fined up to 10% of its annual turnover. In addition to this, individual employees involved can face prison for up to 5 years and company directors can be disqualified for up to 15 years.

These can be reduced or eliminated if a business or individual reports the cartel and co-operates with the CMA and those who “blow the whistle” can potentially receive a reward of up to £100,000.