NI firm facing large fine as part of price fixing cartel
The Competition and Markets Authority (CMA) has recently issued 3 firms with fines totalling more than £36m for breaking competition law in supplying certain concrete drainage products for building projects.
One of the firms is Northern Ireland based FP McCann Ltd – which received a fine of £25m. FP McCann has responded stating it will appeal the decision. The case is notable for the large fines the CMA is imposing and it is one of the few CMA cases that has involved a company based in Northern Ireland. The CMA press release is available here.
The CMA is yet to publish the non-confidential version of the infringement decision. However, the CMA has stated that the alleged cartel operated between July 2006 and March 2013. During which time it is reported that senior directors of the companies involved met to divide up markets amongst themselves and agree to keep prices artificially high. The CMA has stated that some of the evidence on which it has based its findings comes from electronic recordings it obtained of these meetings.
Two other firms were involved in the alleged cartel. They were excluded from the fine announcement as they had previously already admitted their role in the cartel and availed of the CMA's leniency scheme which allows for lesser punishments if a party assists an investigation at an early stage. The CMA's announcement had been expected for some time. Its civil investigation had been delayed whilst it pursued criminal charges against the cartel members.
This case highlights the seriousness of a finding of breach of competition law. The CMA has shown itself willing to pursue criminal charges which can result in imprisonment and impose large fines against the companies involved. The case could have wider implications. This alleged cartel lasted for almost 7 years and would have impacted the price of goods involved in large infrastructure projects. These inflated prices will have had a knock on effect on engineers, construction firms, local authorities and utility companies. These organisations may now be considering whether to pursue damages claims against the cartel members as a result of the financial detriment they will have suffered.
Whilst it is notable that this case involves a Northern Irish firm – this may soon no longer be a rarity. The CMA has previously stated a commitment to expand in all regions of the UK (See CMA's Annual Plan 2018/19). This year the CMA has already recruited a new team member to its Belfast office with other roles currently being advertised. As such firms in Northern Ireland will have to give serious consideration as to whether they feel their staff have been adequately trained in competition law compliance and be aware of how to respond to a CMA investigation.
Should you wish to discuss any aspect of this article please contact Micaela Diver, Partner, Litigation & Dispute Resolution or Stephen Abram, Associate, EU & Competition, Belfast.
Date published: 29 October 2019