Construction whistleblowers encouraged

Image: CMA

The Competition & Markets Authority (CMA) is calling for whistleblowers to come forward and expose cartels operating within the construction industry.

The government has given the fairtrade watchdog an extra £2.8m specifically for its crusade against cartels and the new campaign will target industries with a history of reported cartel activity both in the UK and internationally, as well as sectors with characteristics that make them susceptible to cartels, including construction.

In 2009 fines totalling £129.2m, later reduced to £63m after appeal, were issued to 103 construction firms after widespread cover pricing was revealed.

In the same year, six recruitment agencies in the industry were fined a total of £7.9m for collusion and price fixing. 

Water tank firms were also fined more than £2.6m after it formed a cartel to divide up customers and fix minimum prices for tanks used in large construction projects, such as schools and hospitals.

The CMA said that it currently has four ongoing investigations in the construction sector.

The CMA said it is keen to raise awareness about what constitutes illegal anti-competitive business activity. The CMA’s research shows that, compared with other sectors, construction companies were the least likely to have undertaken any training for staff on cartels.

Those working in construction were also more likely to meet with competitors to discuss prices, with a risk that those discussions cross the line into illegal cartel activity.   

The CMA campaign encourages people to be “Safe, not Sorry” if they think they may have involved themselves in cartel activity and to make sure they are the first to report it to the body.

Witnesses – those not involved themselves but who have seen something untoward – are also asked to “Do the Right Thing” by reporting it to the CMA.

The CMA is reminding people that, if they come forward with information about their involvement, they can receive significant reductions in fines and avoid being disqualified from running a company. If they are the first to come forward, they can receive total immunity, including from criminal prosecution.

And witnesses who blow the whistle can receive a reward of up to £100,000.

Stephen Blake, senior director for cartels at the CMA, said: “We are committed to tackling cartels wherever we find them. More people are reporting illegal activity to us and we urge anyone with information to come forward. If you’re involved, it’s better to be safe, not sorry and to tell us about it first – before someone else does.

“For those who were not involved but have witnessed illegal activity, we urge them to do the right thing. We know that this is a sensitive issue and some people could worry about what might happen to them if they speak to us.

“All information is treated confidentially, and we can discuss any concerns that people may have over keeping their identity secret.”