The Competition and Markets Authority (CMA) has increased the incentive for people providing information and ‘whistleblowing’ by offering a reward of up to £250,000 in exchange for information about potential cartel activity – more than double the previous total reward of £100,000.
A cartel is an agreement between competitors to engage in anti-competitive practices such as price-fixing, market-sharing, bid-rigging or limiting output. Engaging in a cartel is a criminal offence and the penalties for individuals include up to five years in prison and/or an unlimited fine. The businesses involved can also be fined up to 10% of their annual worldwide turnover.
In March this year, the CMA issued a decision against ten UK construction firms, and fined them a total of £59,334,957 for their involvement in the cartel activity of “cover bidding”, whereby firms agreed with each other to submit bids that were not intended to win the tender. Five of the firms were also found to have made “compensation payments” to other bidders for submitting losing bids. Three directors of the firms received disqualification orders (the longest being for seven years and six months). Some of the fines were reduced, so as not to exceed the cap on fines of 10% of their annual worldwide turnover.
The greatly increased incentive for whistleblowers is the latest measure introduced by the CMA in its campaign to prevent and root-out practices which stifle competition in the UK marketplace. The offer of rewards for information runs alongside leniency and reduced fines for parties involved in a cartel who confess their involvement early on. The CMA has also launched a ‘cheating or competing’ campaign to increase awareness of anti-competitive practices and encourage people to take steps to prevent them. Further information on the campaign can be found here. https://cheatingorcompeting.campaign.gov.uk/ .
For more information, please speak to your usual contact at Birketts, Rafael Ruiz or Ed Bouckley.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at June 2023.