We’re continuing to see the CMA pursue price-fixing and market sharing cartels. This is the third cartel fine issued in a little over a month.
The furniture parts case is interesting because it came from a whistleblower complaint via the CMA’s cartels hotline. The whistleblower hotline allows any individual to call the CMA and provide information about a cartel, with a potential reward of up to £100,000 in return for information which helps the CMA to identify and take action against illegal cartels. The CMA has really strengthened its intelligence gathering capability in order to allow it to carry out own-initiative investigations.
The case started out as a criminal investigation into the individuals involved, but the CMA decided not to proceed with a criminal prosecution and instead to pursue a civil case against the companies. Following a series of failures in prosecuting the criminal cartel offence, the CMA seems to have turned its focus back to civil cartel cases. Though this is not to say the CMA is no longer pursuing individuals, as we saw the CMA obtain a director disqualification undertaking at the end of 2016 from a director found to ‘personally contributed’ to his company’s competition law infringement.
The fines in this case are substantial, even after 20% reductions for ‘settlement’ (to reflect that the companies admitted the infringements and followed a streamlined procedure). They might not seem high compared to the fines issued by the European Commission, but the companies involved here are relatively small.
Meanwhile, the CMA has also issued a ‘statement of objections’ (a provisional infringement decision) to two providers of cleanroom laundry services. The CMA’s market sharing allegations in that case seem to arise out of a joint venture and a trademark licence, which would make this far from a typical cartel/market sharing agreement.
These cases highlight the need for businesses to be aware of their obligations under competition law, particularly any agreement or contact they may have with competitors.
When competitors collude like this, they do so at the expense of customers, increasing prices, and reducing quality and choice. In this case, the collusion concerned products which are found in furniture in homes and offices across the UK. Today’s settlement demonstrates the CMA’s determination to pursue those who take part in anticompetitive behaviour, which is harmful to consumers, businesses and the wider economy.