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Cheating or competing?

The UK Competition and Markets Authority (CMA) launched its ‘Cheating or Competing?’ campaign this week, and specifically named the Construction Sector as one which needs to "get its house in order". The sector is no stranger to Competition Enforcement action by the CMA and its predecessor the Office of Fair Trading. In 2009, Construction Businesses were the subject of perhaps the largest Competition Enforcement case by the UK Competition Authorities involving more than 100 businesses accused of cover bidding. More recently, the CMA has taken action against a pre-cast concrete drainage cartel, cover bidding in the design construction and fit-out services sector, and is currently investigating suspected problematic arrangements in the supply of construction services, and in the supply of groundworks products to the construction industry.

Much to the concern of the CMA, a recent survey of 400 UK senior representatives from construction firms and other businesses that work in the sector found that only 6% of firms in this sector were familiar with competition law and what it was designed to stop. Also, 29% of those surveyed thought it was OK to attend meetings with competitors to agree prices. Some 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.

The CMA’s Senior Director of Cartels, said “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."

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