Howard Cartlidge, Senior Director, Cartels, Competition and Markets Authority.

The Competition and Markets Authority (CMA) has issued a warning to the construction industry with a new campaign which asks firms if they are ‘Cheating or Competing?’

The warning comes on the back of several high-profile cases which the CMA has taken in the construction sector recently where we found evidence of significant illegal business practises, including price fixing, market sharing and bid-rigging. We subsequently handed out fines to those involved and directors were disqualified as a result of these cases. These cases were not a surprise to the CMA; our research shows that only 6% of senior representatives the construction industry are familiar with competition law, although the CMA understands that most businesses do want to act ethically.

The objective of the new campaign is to educate businesses about these illegal business practices. We are also encouraging people to come forward if they suspect a business is gaining an unfair advantage through anti-competitive activities.

What you need to know

Healthy competition amongst rivals means they set their prices independently of each other, without collusion, and customers can shop around to get the best deal. It also ensures a level playing field for businesses to compete. But when rivals agree to act together to undermine competition it can inflate prices, reduce choice and quality, and erode customer trust. This kind of arrangement is known as a business cartel – it’s a form of cheating and is illegal no matter who you are or the size of the business you may run.

The consequences

If you are found to have fallen foul of competition law, you and your business could face severe consequences including:

• fines for businesses up to 10% of annual global turnover
• disqualification for directors
• reputational damage
• being pursued for damages from other businesses/customers
• personal fines for individuals and even prison

What you need to do

Being educated about competition law should be a priority for all construction businesses. It is vital that you understand how to recognise these practices and how to react should you witness them. We have lots of resources on our campaign page that explain what to be on the lookout for.

Don’t risk the consequences – check your business practices and come forward if you think you have been involved in, or seen, anything illegal. If you’re the first to report something you were involved in, you may be able to get leniency, which means if you are the first to report and co-operate with a CMA investigation, you could receive immunity from fines, criminal prosecution and director disqualification. For those that have witnessed something illegal, if the information you provide leads to an investigation, you may receive a reward. Find out more: gov.uk/cheating-or-competing