Competition watchdog opens new construction probe

22 March 2019 | By Neil Gerrard

The Competition and Markets Authority (CMA) has launched a new investigation into anti-competitive arrangements in the construction sector.

The CMA said it would look at potentially corrupt arrangements “in the supply of construction services” in Great Britain, which may infringe Chapter 1 of the Competition Act 1998.

The watchdog did not make clear precisely which area of the sector it is examining and said the case was at an early stage, with no assumption that the Competition Act had been infringed.

It has also not yet reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections to any of the parties under investigation.

Not all cases result in the CMA issuing a statement of objections. It is expected to make a decision on whether to proceed with the investigation or close it by September this year.

Chapter 1 of the Competition Act prohibits any agreement of practice that restricts competition, with cartels considered to be the most serious form of anti-competitive agreement.

Companies found to have breached Chapter 1 can be fined up to 10% of worldwide turnover, while individuals can be disqualified from serving as a director for up to 15 years. Since 2003, there have also been criminal offences for individuals involved in cartels. Participation by individuals in price-fixing, bid-rigging, market sharing or limitation of supply may lead to a prison sentence of up to five years, unlimited fines or both.

The news of the CMA’s latest probe comes after five firms in the fit-out sector were fined a total of £7m for submitting ‘cover bids’.

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