CMA fines three companies over cartel covering

Following a lengthy investigation process, the Competition and Markets Authority (CMA) has fined three companies a total of £36M for breaking competition law through what is called ‘cartel covering’ of the British concrete drainage product market.

Specifically, the CMA has issued a £25M fine to the Northern Ireland-based firm FP McCann Ltd, a £7M fine to the Derbyshire-based Stanton Bonna Concrete Ltd, and a £4M fine to the Somerset-based CPM Group Ltd for violating competition law between 2006 and 2013.

Going into further detail, the offence committed, cartel covering, entailed the coordination of the firms’ prices, the sharing of the market through the allocation of customers, as well as the regular exchange of competitively sensitive information, all of which create a monopoly in their respective market and violate competition law within business.

The three companies who were a part of this arrangement where in the business of manufacturing pre-cast concrete products, such as drainage pipes, which are imperative to large infrastructure projects and are frequently required in the construction of roads, railways, and water management networks.

Both Stanton Bonna Concrete Ltd and CPM Group Ltd admitted to their involvement in the violation of competition law and therefore had their fines reduced, whereas FP McCann Ltd was required to pay a much heftier fine after the CMA uncovered damning evidence which consisted of recordings, showing senior executives from each firm at meetings discussing the arrangement.

The Chief Executive of the CMA, Andrea Coscelli stated: “These companies entered into illegal arrangements where they secretly shared out the market for important building products and agreed to keep prices artificially high. This is totally unacceptable as it cheats customers out of getting a good deal.

“The CMA will not hesitate to issue appropriately large fines in these cases and we will continue to crack down on cartels in the construction sector and in other industries.”

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