Whistleblowers are being offered up to £100,000, as the Competition and Markets Authority (CMA) launches its first-ever advertising campaign to crack down on cartels.
Following the conclusion of CMA’s investigation into price fixing in the catering equipment industry last year, this step is something the sector should take note of.
Illegal cartels are businesses which cheat their customers by agreeing not to compete with each other in order to keep their prices high. The CMA detailed that this practice stops ordinary people and other businesses from getting a fair deal as well as stifling competition.
The ‘Cracking down on Cartels’ campaign will encourage people who have witnessed illegal activity to report it, by offering a reward of up to £100,000 as well as promising them anonymity.
Andrea Coscelli, CMA’s acting chief executive, said: “Cartels are a form of stealing that cheat ordinary people as well as other businesses by undermining competition, and we are committed to tackling them wherever we find them. Cartels are carried out in secret to make you think you are getting a fair deal, even when you are being conspired against to keep prices high.
“Cartels are both harmful and illegal, and the consequences of breaking the law are extremely serious. That is why we are launching this campaign – to help people understand what cartel activity looks like and how to report it so we can take action.”
CMA research found that whilst most businesses have a shared ethical sense that conduct such as price fixing is unfair or wrong, less than a quarter of businesses said they knew competition law well.
This research has led to the creation of the first advertising campaign run by the CMA specifically designed to stamp out cartel activity and encourage people to report it to the CMA. Adverts will appear in people’s social media feeds, such as Twitter and LinkedIn, as well as on key websites.
Cartels have been uncovered in a range of industries and the campaign builds on recent CMA cartel cases. These have included:
Fining two furniture parts-makers £2.8m for agreeing not to compete on price and who would supply which customers, following a tip-off from an informant.
Fining four estate agents a total of £370,000 for price fixing, after information was received as a result of an earlier CMA campaign following a previous case in the estate agency sector.
Disqualifying the managing director of an online poster supplier for 5 years after his company was found to have been part of an online price fixing cartel, which followed an application for leniency by the other company involved.
Further cases of suspected cartel are currently under investigation.