Blowing The Whistle On Anti-Competitive Cartels

The UK competition regulator, the Competition and Markets Authority (CMA), has announced a 30% increase in "tip-offs" relating to cartels in 2017 following its "Cracking down on Cartels" social media and website campaign, which we blogged about last year. Allied with an increased enforcement budget, the CMA has now launched a new "Be safe, not sorry" campaign to encourage more people to get in touch with information about cartels.

There are severe penalties for being involved in a cartel, which are agreements where two or more competing businesses agree to coordinate their behaviour rather than compete with each other. Cartels might involve, for example, agreeing to fix prices, share customers or markets, or collude on "bid-rigging" arrangements. The impact on both customers and competitors can be very significant. Prices may be kept artificially high, consumer choice can be reduced and product quality and innovation can suffer. Over the past two years, the CMA has issued some £151million in fines following successful investigations into anti-competitive practices, many of which we have covered on this blog - see for example here and here.

The new cartels campaign will target a range of sectors that are at greater risk of anti-competitive behaviour, including construction, manufacturing and business support services (which the CMA describes as having "either a history of reported cartel activity or characteristics that make them vulnerable to cartels").

Leniency

The CMA's new campaign is about encouraging people with information about cartel activity to report it to the CMA, and particularly about highlighting its leniency program for those who have been involved in cartels and other anti-competitive behaviour. The first participant to confess their involvement to the CMA can, in certain circumstances, get immunity from all fines, criminal penalties and director disqualification.

However, notwithstanding the CMA encouraging cartel participants to contact them direct, we would strongly recommend that a business take specialist competition law advice before doing so. There are several reasons for this:

While our advice would almost always be to seek leniency, it is vital to understand exactly what breach of competition law you are confessing to. This may mean conducting an internal investigation to establish exactly what has happened, in order to ensure your leniency application covers everything for which you might be liable. Otherwise there...