The Competition and Markets Authority (CMA) has launched yet another investigation into suspected anti-competitive arrangements in the UK construction sector.

The CMA has decided to further pursue its investigation into suspected anti-competitive arrangements in the supply of construction services in Great Britain which may infringe Chapter I of the Competition Act 1998.

The CMA began its initial investigation in March 2019 and has been information gathering since then.

ThE CMA said that the case is still at an early stage and no assumption should be made that the Act has been infringed, nor has it reached a view as to whether there is sufficient evidence of an infringement of competition law.

If the CMA concludes that there has been an infringement, it will issue a statement of objections to the parties under investigation who will then be given the opportunity to make written and oral representations.

The CMA has launched a number of investigations into ant-competitive behaviours in the construction sector in recent years.

In 2016 water tank firms were fined over £2.6 million after they formed a cartel, agreeing to fix the price of tanks, divide up customers and rig bids for contracts.

A separate inquiry was launched in April 2016 into the supply of precast concrete drainage products in respect of allegations concerning CPM Group Ltd, FP McCann Ltd and Stanton Bonna Concrete Ltd.

Subsequently, in December 2018 the CMA issued a statement of objections alleging that 3 suppliers of pre-cast concrete drainage products breached competition law by taking part in a cartel agreement to fix or coordinate prices and share the market in relation to the provision of certain pre-cast concrete drainage products in Great Britain. It followed settlement by 2 of the suppliers – Stanton Bonna Concrete (together with its parent companies) and CPM Group – who have admitted their participation in the alleged cartel.

Both firms have agreed to pay fines including a discount to reflect the resource savings to the CMA generated by the companies’ admissions and their cooperation with the CMA’s investigation.

The final level of any fines will be decided by a new case decision group, in accordance with the CMA’s administrative process. SBC also reported the alleged cartel conduct under the CMA’s leniency policy and will benefit from a discount on any fine, provided it continues to co-operate and complies with the other conditions of the CMA’s leniency policy.

The CMA’s investigation into FP McCann Limited is continuing.

In another investigation launched in 2017, the CMA has provisionally found that 3 major suppliers to the construction industry broke competition law.

The CMA has provisionally found that M.G.F. (Trench Construction Systems) Ltd, Vp plc and Mabey Hire Ltd formed a cartel to reduce competition and keep prices up. This involved sharing competitively sensitive, confidential information on pricing and commercial strategy and coordinating their commercial activities.

The groundworks products manufactured by the firms (including braces, props and sheeting) are used to protect excavations – such as those made for foundations or for laying pipes – from collapse and are important for keeping construction sites safe.

The 3 companies supply the products for a range of major housing and road developments, railway line works and water pipe upgrades.

In April 2019 the CMA issued a Statement of Objections setting out its provisional findings that the suppliers had breached competition law by coordinating their commercial behaviour (in particular pricing practices) with the aim of reducing competition on price and strategic uncertainty, including through the sharing of confidential pricing and strategic information.

The Statement of Objections set out the CMA’s provisional view that Vp and MGF operated the cartel for periods totalling nearly two years and Mabey took part for a single period of 5 months.

The investigation is currently continuing - the period for written and oral representations on the statement of objections has been extended from July to October 2019 to given the parties additional time to provide the information.

The companies’ behaviour came to light after one of the firms blew the whistle and brought information about the conduct to the CMA’s attention. Mabey has confessed its role and will not be fined in accordance with the CMA’s leniency programme – provided it continues to co-operate with the CMA’s investigation.

The firms now have the opportunity to consider the detail of the CMA’s provisional findings and respond to it. The CMA will carefully consider any representations made before issuing its final findings as to whether the law has been broken.

Michael Grenfell, the CMA’s Executive Director for Enforcement, said:

“These are 3 major suppliers of equipment used to keep construction workers safe. It is crucial that builders and their customers benefit from genuinely competitive pricing for this essential equipment.”

“Everyone must follow competition law, which protects customers from being exploited and paying more, as well as encouraging companies to compete for business in other ways – through innovation, quality and service.”

“The CMA uses its powers vigorously and robustly to root out illegal cartels.”