Precast Concrete Cartel And The UK Competition Authority: A Hardened Approach To Enforcement

Author:Mr Samuel Beighton and Bernardine Adkins
Profession:Gowling WLG
 
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On 23 October, the UK competition authority (the CMA) publicised its decision to fine three firms (and certain parent companies) a total of more than £36 million for an infringement of UK and EU competition law.

In addition to these fines, the CMA has pursued a successful criminal prosecution, and has secured director disqualifications, with individuals disqualified from acting as company directors for periods of between 6½ and 7½ years.

The case therefore exemplifies the breadth of the CMA's enforcement powers, and how the CMA will apply these powers, confirming the significant risks that companies and individuals face when competition law is infringed.

Precast concrete products: The CMA's civil investigation The CMA's civil investigation concerned the conduct of three firms, FP McCann Limited, Stanton Bonna Concrete Limited, and CPM Group Limited (together, the Parties) in relation to the supply of certain precast concrete drainage products in Great Britain.

Precast concrete drainage products are essential for large-scale construction and infrastructure products, including roads, railways, and water management projects.

Following its civil investigation, the CMA found that between July 2006 and March 2013 the Parties infringed UK and EU competition law by:

Agreeing to fix or coordinate their prices charged to customers. Allocating customers amongst themselves so as to "share the market". Exchanging competitively sensitive information.[1] The CMA considered that throughout the infringement period the Parties' combined share of supply was more than 50%, and from 2010 onwards it was more than 90%.[2]

The CMA has also confirmed that it used covert recordings of meetings between the Parties as evidence in the context of its civil investigation,[3] with these covert recordings having been made by the CMA during its criminal investigation (considered below).

Two of the Parties, Stanton Bonna Concrete Limited and CPM Group Limited, have admitted their involved in the infringement, and the fines imposed upon their corporate groups have been reduced to reflect these admissions.

However, FP McCann Limited has indicated that it intends to contest the CMA's findings on appeal.

Harm to customers as a result of the infringement

The CMA's Chief Executive, Andrea Coscelli, confirmed in a press statement that the Parties:

"entered into illegal arrangements where they secretly shared out the market for important building products and agreed to keep...

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