The Competition and Markets Authority (CMA) has welcomed a judgment from the Competition Appeal Tribunal upholding the CMA's decision to impose a £25 million-plus fine on FP McCann Ltd for participating in an illegal cartel.

The appeal had followed an Infringement Decision issued by the CMA in October 2019 finding that 3 suppliers of pre-cast concrete drainage products had infringed UK and EU competition law in relation to the supply of certain products to customers in Great Britain between July 2006 and March 2013.

The CMA found that the suppliers broke competition law by agreeing to fix or coordinate their prices, share the market by allocating customers and regularly exchanging competitively sensitive information.

Fines totalling more than £36 million were imposed on CPM Group Ltd, FP McCann Ltd and Stanton Bonna Concrete Ltd (and its parent companies Bonna Sabla SA, Consolis Finance SAS, Consolis SAS and Consolis Group SAS)

FP McCann Ltd filed an appeal in the Competition Appeal Tribunal in December 2019 against the CMA’s findings in the Infringement Decision and the penalty imposed.

In its judgement published on 22 December 2020, the Tribunal unanimously rejected FPM’s appeal and upheld the Decision to impose a penalty on FPM of £25,449,676.

The judgement said the CMA had stated that the infringement amounted to a serious infringement of competition law, involving the most serious forms of anti-competitive conduct, by the leading suppliers of pre-cast concrete drainage products in Great Britain, over a significant period of time.

In particular, the CAT said the CMA had found that there was evidence that the arrangement was initiated in response to difficult market conditions, with the express intention of addressing the deterioration of prices in the market. Statements made by individuals from the companies concerned attending recorded meetings had highlighted that the ongoing object of the arrangement was to increase prices and maintain market positions.

The judgement said there was evidence the three companies had sought to keep the arrangement secret, with discussions about how to disguise the existence of the arrangement from customers, including by ensuring that agreed prices were not exactly the same.

With regard to the impact on customers, the judgement said:

“The CMA noted that pre-cast concrete drainage products were high value items which were used in large infrastructure projects including drainage and water management, roads and railways, as well as in other construction projects of varying sizes.

“Typical customers included civil engineering companies, construction companies and suppliers to the construction industry, utilities providers, as well as (for publicly-funded projects) local and national government. End customers included house-buyers, construction companies and tax-payers (through their contribution to publicly funded projects).”

Commenting on the Tribunal’s finding in a statement, the CMA said:

“The Tribunal’s judgment reinforces the need for companies to engage in active competition and not cheat by colluding with their rivals to fix prices or share out the market between them. The CMA will continue to crack down on illegal cartels and impose significant fines to deter anti-competitive behaviour that harms consumers and the wider economy.”