UK business unaware of cartel laws, CMA survey finds
More than 40% of business were unaware that it was illegal to fix prices, according to a survey conducted for the UK's competition regulator.
The ICM survey, as part of a Competition and Markets Authority campaign to encourage more whistleblowers to expose illegal cartels, found only 57% of firms knew price fixing was illegal.
Almost half either didn’t know or thought it was legal to discuss prices with competing bidders when quoting for new work (23% said ‘don’t know’, and 25% actually thought it was legal).
The survey of 1200 companies also revealed that 59% did not know or thought that dividing up and sharing customers with rivals was legal, and 35% actually thought it was legal.
Whistleblowers who report cartels can receive a reward of up to £100,000, while businesses who realise or discover they are guilty of wrongdoing and report themselves to the authority can have potential penalties cancelled or reduced, the CMA said.
“Businesses that fix prices or rig contracts are breaking the law and ripping people off. We know that the vast majority of businesses want to do the right thing, but pleading ignorance simply isn’t good enough,” said Howard Cartlidge, senior director of cartels at the CMA.
Those found guilty of participating in a cartel activity can be fined up to 10% of annual turnover while individuals can be disqualified as a director or face prison terms of up to five years.
The campaign is targeting industries including construction, manufacturing, recruitment, estate agents and property management and maintenance. These are sectors identified as particularly susceptible to cartels, the CMA said.
It cited as an example the case of a group of estate agencies in Somerset in south-west England that were fined a total of £370,000 for fixing minimum commission rates “such that local home owners had been denied a fair deal when selling their property”.
Two company directors were disqualified as a result, the CMA added.