Construction firms fined £36m for breaking competition law

The Competition and Markets Authority (CMA) has issued three firms with fines totalling more than £36m for breaking competition law by being part of an illegal cartel supplying concrete drainage products for building projects.

Northern Ireland-based firm FP McCann Ltd is facing a fine of more than £25m for its part in the scheme. Derbyshire-based Stanton Bonna Concrete Ltd is due to pay more than £7m, and Somerset-based CPM Group Ltd are due to pay £4m.

The fines have been imposed after the CMA found that the companies broke competition law by taking part in an illegal cartel covering the UK. From July 2006 to March 2013, they agreed to fix or coordinate their prices, shared the market by allocating customers and regularly exchanged competitively sensitive information.

These arrangements continued for nearly seven years and involved meetings attended by senior executives from each of the firms. The CMA recorded a number of these meetings and used them as evidence when arriving at its final decision.

In calculating financial penalties, the CMA say they take into account a number of factors including seriousness and duration of the infringement, turnover in the relevant market and any mitigating and/or aggravating factors.

Last year, two of the three firms, Stanton Bonna Concrete Ltd and CPM Group Ltd, both accepted that they broke competition law by engaging in these arrangements. Accordingly, under the CMA’s provisions for leniency and settlement processes, they have received reductions to their fines.

Pre-cast concrete products, such as drainage pipes, are of crucial importance to large infrastructure projects and are often used in roads and railways or water management projects.

Customers for these products include engineering and construction firms, utilities providers and local and national government across the UK. At the time of the infringement the firms were regarded as being amongst the leading players in the market.

Andrea Coscelli, CMA chief executive, said: “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.”