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Cheating or competing? Ignorance won’t help agents who break the law

Friday 28 February 2020

The Competition and Markets Authority (CMA) has issued a warning to businesses with a new campaign, which asks firms if they are Cheating or Competing?

The campaign helps businesses to stay on the right side of competition law. For businesses found to have broken the law, pleading ignorance will not be a defence.

Cheating or Competing?

The campaign follows a sustained CMA crackdown against illegal cartels, where they issued over £43 million in fines last year alone.

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

Breaking the Law

The consequences of breaking the law are serious. In December, three Berkshire agents were fined more than £600,000 for illegally fixing the minimum commission rates they charged their residential customers.

Helping businesses to stay within the law

CMA also acknowledges that most businesses want to comply with the law. The Cheating or Competing? campaign is designed to help businesses do just that, with definitions, case studies, and a means to report a cartel if the need should arise.

Cheating or Competing? What is a cartel? Cartel Case Studies

CMA Research

New research, conducted on behalf of the CMA, revealed that only six per cent of firms in this sector were familiar with competition law and that general understanding of the illegality of these business practices is low.

29 per cent of those surveyed thought it was acceptable to attend meetings with competitors to agree prices. A further 32 per cent thought agreeing not to supply each other’s customers was legal, and a quarter (25) saw no problem with discussing bids and agreeing who would get which tenders.

The research goes on to show that only six per cent of management teams of the construction firms surveyed had received competition law training. Additionally, only six per cent of the respondents had actively sought out information on how to comply with the law.

Quote mark

The CMA is cracking down on businesses that collude to rip off customers by fixing prices, sharing out markets amongst themselves or rigging bids. Our message to them is that we know cheating when we see it, even if you don’t. Pleading ignorance is no defence; it’s up to businesses to know what these unfair practices look like and avoid them.

By 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’s too late.

The CMA understands that most businesses want to do the right thing and the campaign is designed to help them do that and to ensure fair dealing. Putting an end to an illegal cartel means that businesses and customers don’t lose out because

Howard Cartlidge - CMA Senior Director of Cartels