Update – CMA continues an investigation into construction industry practices
In November of last year, we gave an update on the latest developments from the Competition and Markets Authority (CMA), reporting on:
– a particular case where three construction firms received combined fines of over £36m for breaching Competition Act 1998 offences (fixing/coordinating prices, allocating customers and exchanging competitively sensitive information); and
– the CMA’s more general focus on the construction sector, as an industry at particularly high-risk of these anti-competitive behaviours being adopted.
This focus is continuing. Separate to the case we reported on in November, the CMA announced in March 2017 that it had opened an investigation into the provision of products and/or services to the construction industry in the UK. A statement of objection was issued in April 2019 to three construction companies alleging that they co-ordinated pricing practices and shared competitively sensitive information.
The CMA is continuing to gather evidence and, as of their update, this month has extended the timeline for this stage of the investigation (which includes oral and written representations in response to the statement of objection) until July 2020. Once the CMA has finalised their evidence gathering, they will work towards issuing the final infringement decision.
As we covered in November, the CMA treats offences of this nature very seriously and the potential fines that are attached to these infringement decisions will be (a) tied to the turnover of the company and (b) likely to be very substantial. Self-reporting and assistance with investigations remain vital as mitigation. As a reminder, £25.5m of the £36m of fines we reported on in November were to the single company that did not co-operate. In the ongoing case, one company has confessed its role and will receive no fine provided it continues to co-operate with the CMA.
With the CMA keeping its focus on the construction industry, our specialist team can assist if you have any questions about what this means for your business.Back to Our Thinking →