Competition & Markets Authority – Supply Of Construction Services

The Competition and Markets Authority has announced that it is investigating suspected anti-competitive arrangements in the supply of construction services in Great Britain, which may infringe Chapter I of the Competition Act 1998.

This case is at an early stage, and the CMA has yet to determine that the CA98 has been infringed; nonetheless, CECA is advising its members to ensure they are aware of the relevant aspects of competition law, and strongly advises its members that if they should encounter anti-competitive behaviour to report it to the CMA. Not all cases result in the CMA issuing a statement of objections, and a decision as to whether or not it will proceed with prosecutions is expected by September.

The CMA’s announcement comes just weeks after five fit-out contractors in the South East were fined a total of £7 million after admitting breaches of competition law. Each company admitted to participating in ‘cover bidding’ in competitive tenders, by agreeing with each other to place bids deliberately designed to lose the contract, thereby reducing the intensity of competition in contravention of the law.

CECA is concerned that members may not fully be aware of aspects of competition law, and has provided members with a briefing on the subject, which is available in the members’ area.

Commenting, CECA Director of External Affairs Marie-Claude Hemming said: “There is anecdotal evidence that anti-competitive practices are widespread in the construction industry and are found in several tiers of the supply chain in all parts of the UK.

“While we believe these practices are unlikely to involve CECA members, we have nonetheless briefed our membership to ensure they are aware of the law and the potential penalties that can be imposed for breaches of the rules, on both firms and individuals.

“In some cases, individuals may not even know they are breaking the law, particularly with reference to matters discussed at cross-industry networking or other social events.

“To ensure our members are fully aware of their obligations, we are furthermore offering members the option to engage in training on the relevant aspects of competition law that may impact their businesses.”

If you are a CECA member and would like to arrange training on competition law or on how to avoid potentially anti-competitive behaviour, contact CECA Chief Executive Alasdair Reisner. The CECA member briefing on this matter is available in the members’ area here.