CMA calls for more whistle-blowers to expose price-fixing cheats

Competition & Markets Authority

The Competition and Markets Authority (CMA) is calling for more whistle-blowers to expose businesses engaging in illicit practices such as price fixing.

The launch of a national awareness campaign comes as new research shows many firms don’t know enough about how to comply with competition law.

The CMA’s latest cartel 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.

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ICM research released by the CMA today to coincide with the campaign shows that out of 1,000 companies surveyed, only 57% knew it was illegal to fix prices and nearly half either didn’t know or thought it was legal to discuss prices with competing bidders when quoting for new work.

Some 59% of businesses, meanwhile, either didn’t know or thought that dividing up and sharing customers with rivals 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.”

The campaign is targeting several industries, including manufacturing, that have been identified as particularly susceptible to cartels.

Previous campaigns have driven a 30% rise in the number of tip-offs to the CMA’s cartels hotline.

The campaign uses simple imagery on social media sites and a dedicated website and comes as the CMA continues to step up its enforcement action.

Since April 2015 it has issued over £155 million in fines following investigations into anti-competitive practices and it is currently investigating 15 cases across a variety of sectors.

Two years ago, the catering equipment sector was the subject of a massive price-fixing investigation by the CMA. It ended with the body fining Foster Refrigerator £2.3m for restricting online prices and sending warning letters to 20 catering equipment suppliers and dealers suspected of imposing minimum advertising price policies.

Businesses found to have been involved in illegal cartels can be fined up to 10% of their annual turnover.

Individuals can face up to five years in prison and directors can be disqualified from holding director positions for up to 15 years. These can be reduced or eliminated altogether where a business or individual report their involvement in a cartel and co-operates fully with the CMA’s investigation.

Witnesses who blow the whistle can receive a reward of up to £100,000, the CMA has said.

Tags : CMACompetition and Markets AuthorityFoster Refrigerator
Andrew Seymour

The author Andrew Seymour

1 Comment

  1. Interesting that this appears to be a huge stick to beat the manufacturing side of the business doesn’t it? What about investigating the distributors who openly keep trading with the suppliers knowing they don’t have enough capital to pay their debts? The they go in to liquidation and start up with the same directors weeks later? Should they not be disqualified from holding a directorship within the trade? Fosters problem was they didn’t cover their backsides with terms and conditions as well as trusting a great product with some clueless distributors, i mean honestly! don’t give a monkey a machine gun do you? What were you expecting? I wonder how this industry would have looked today if Fosters had thought things through and perhaps enlisted better legal advice? It could have been a brave new world instead of the wild west it’s become where a race to the bottom and dishonesty between supplier and distributor is the norm. Stick a fork in this industry coz it’s done!

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