{"id":72420,"date":"2020-02-26T07:48:26","date_gmt":"2020-02-26T07:48:26","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=72420"},"modified":"2020-02-26T07:48:26","modified_gmt":"2020-02-26T07:48:26","slug":"illegal-cartels-construction","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/illegal-cartels-construction\/72420\/","title":{"rendered":"New CMA campaign continues crackdown on illegal cartels in construction"},"content":{"rendered":"

The Competition and Markets Authority<\/a> (CMA) has launched a new campaign urging construction businesses to compete, not cheat<\/h2>\n

The CMA has been cracking down on illegal cartels in the construction industry. It handed out \u00a343m in fines last year.<\/p>\n

Anti-competitive practices<\/a> like price fixing, bid rigging and dividing markets or customers between competitors \u2013 commonly referred to as \u2018market sharing\u2019 \u2013 can take place in any business. However, a number of recent CMA cases have come from the construction industry.<\/p>\n

New research, conducted on behalf of the CMA, revealed that only 6% of firms in construction were familiar with competition law and that general understanding of the illegality of these business practices is low.<\/p>\n

29% of those surveyed thought it was OK to attend meetings with competitors to agree prices. A further 32% thought agreeing not to supply each other’s customers was legal, and 25% saw no problem with discussing bids and agreeing who would get which tenders.<\/p>\n

The research also shows that only 6% of management teams in construction had received competition law training. Additionally, only 6% of the respondents had actively sought out information on how to comply with the law.<\/p>\n

\u2018We know cheating when we see it\u2019<\/h3>\n

Howard Cartlidge, the CMA\u2019s senior director of cartels, commented: \u201cThe CMA is cracking down on businesses that collude to rip off customers by fixing prices, sharing out markets amongst themselves or rigging bids.<\/p>\n

\u201cOur message to them is that we know cheating when we see it, even if you don\u2019t. Pleading ignorance is no defence; it\u2019s up to businesses to know what these unfair practices look like and avoid them.<\/p>\n

\u201cBy ensuring you stay on the right side of the law, you can avoid substantial fines, director disqualification or jail. And if you suspect something illegal is going on, report it to us before it\u2019s too late.\u201d<\/p>\n

Secret conversations with illegal cartels<\/h3>\n

The CMA has also lifted the lid on secret conversations that take place inside illegal cartels.<\/p>\n

An investigation into a pre-cast concrete drainage cartel<\/a> that resulted in \u00a336m in fines in 2019, revealed that the businesses concerned held regular secret meetings \u2013 four of which were secretly recorded by the CMA \u2013 away from business premises, in hotel meeting rooms.<\/p>\n

The businesses discussed and agreed certain price lists, which were then used by sales teams as a basis for negotiating with customers. They also decided that they would not compete for each other\u2019s customers on certain fixed price contracts. One of the individuals at a cartel meeting said:<\/p>\n

\u201c\u2026I\u2019m quite happy if we agree jobs, because you know, it is pointless cutting the bloody price, we should be sticking out, as we\u2019ve always said, get a better price\u2026\u201d<\/p>\n

And another said:<\/p>\n

\u201c\u2026just set the term deals up, set the … market rates up and the merchants rates up … and the likelihood is you\u2019re going to get the same market share\u2026\u201d<\/p>\n

The CMA also fined 3 Berkshire estate agents in 2019 for illegally fixing the minimum levels of commission fees that they would charge customers on the sale of residential properties. Four estate agents implemented the illegal arrangement primarily through secret meetings, as shown in the evidence gathered:<\/p>\n

\u201cThe company average fee is now around 1.8%. I am willing to do whatever it takes to get this sorted. We\u2019ve had meetings over the last few weeks with other agents [\u2026] and there is at last a general consensus that something should be done. Let me know if you would like to meet with several of our competitors.\u201d<\/p>\n

\u2018Cheating or Competing?\u2019 campaign<\/h3>\n

The CMA\u2019s campaign encourages people to visit the CMA\u2019s designated\u00a0\u2018Cheating or Competing?\u2019 page<\/a>\u00a0which features videos, short guides and case studies to explain what illegal cartels are and how people can report them.<\/p>\n

The campaign has received support from the Federation of Small Businesses<\/a> and the Institute of Directors<\/a>.<\/p>\n

Charlotte Valeur, chair of the Institute of Directors, said: \u201cCompetitive markets are good for both consumers and businesses, encouraging innovation and keeping prices down, so it\u2019s worrying that the CMA has found that many businesses leaders don\u2019t know their full legal responsibilities. Firms should prioritise director training and professional development to ensure they do not inadvertently fall foul of the law.\u201d<\/p>\n

National chair of the Federation of Small Businesses, Mike Cherry, added: \u00a0<\/strong>\u201cThis awareness campaign from the CMA is so important.<\/p>\n

\u201cGreater awareness is needed for all businesses about these practises, some of which could be ruinous for small businesses<\/a>. SMEs want to do the right thing, which is why it is so important to have a clear understanding of the law surrounding, anti-competitive behaviours such as cartels and price-fixing.<\/p>\n

\u201cFSB\u2019s own research has found that such practices could have a serious impact on competition as well as issues involving diversity and creating a more complex business environment.\u201d<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

The Competition and Markets Authority (CMA) has launched a new campaign urging businesses to compete, not cheat.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[34600,676,276],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-72420","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-cma","8":"tag-construction","9":"tag-government"},"acf":[],"yoast_head":"\nNew CMA campaign continues crackdown on illegal cartels in construction<\/title>\n<meta name=\"description\" content=\"The Competition and Markets Authority (CMA) has launched a new campaign urging construction 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