The CMA calls for more whistle-blowers in construction

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The Competition and Markets Authority (CMA) is targeting construction and manufacturing industries calling for more whistle-blowers to expose business cartels

The CMA’s latest business cartels awareness campaign aims to educate businesses about which practices are illegal and urges people to come forward if they suspect a business has taken part in cartel behaviour, such as fixing prices or rigging contracts.

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

  • Only 57% knew it was illegal to fix prices;
  • Nearly half either didn’t know or thought it was legal to discuss prices with competing bidders when quoting for new work (23% said ‘don’t know’, and 25% actually thought it was legal);
  • Significantly more than half (59%) didn’t know or thought that dividing up and sharing customers with rivals was legal (24% said ‘don’t know’ and 35% actually thought it was legal).

Howard Cartlidge, Senior Director of Cartels at the CMA, said: “Businesses that fix prices or rig contracts are breaking the law and ripping people off.

“The victims are customers and other businesses, who are getting cheated out of a fair deal.

“We know that the vast majority of businesses want to do the right thing, but pleading ignorance simply isn’t good enough. Today’s campaign makes it easy to find out the facts.

“If you know of something illegal – do the right thing and tell us about it.”

The campaign is targeting industries including construction, manufacturing, recruitment, estate agents and property management and maintenance. These are sectors identified as particularly susceptible to business cartels.

The campaign uses imagery on social media sites and a dedicated website. Since April 2015 the CMA has issued over £155m in fines following investigations into anti-competitive practices and it is currently investigating 15 cases in construction services, roofing materials and estate agency.

Examples of CMA action include:

  • Two of the biggest suppliers of charcoal and coal for households in the UK were fined £3.4m for taking part in a market sharing cartel.
  • Water tank firms were fined over £2.6m, after they formed a cartel to divide up customers, fix minimum prices and share commercially sensitive information for tanks used in large construction projects (such as schools and hospitals).
  • Somerset estate agents were fined over £370,000 for fixing minimum commission rates, such that local homeowners had been denied a fair deal when selling their property. The CMA also secured the disqualification of 2 company directors in this case.
  • An Amazon Marketplace seller was fined over £160,000 and its director disqualified from running a company after agreeing to fix the prices of popular posters and frames with a competitor.

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