Competition and Markets Authority (CMA) decision was published about Micronclean Limited and Berendsen Cleanroom Services Limited who were found to have allocated territories and customers plus both companies had agreed not to compete with each other’s relevant allocations.
This is a very serious breach of competition laws – the market is essentially rigged in their favour by sharing the market and agreeing not to compete. This can lead to inflated prices, a lack of innovation and little choice for consumers in the market. This behaviour favours the companies financially, and not the consumer; totally against the principles of fair competition.
The CMA decided that the restrictions the companies agreed constituted as an infringement of competition laws between 30th May 2012 to 2nd February 2016. The evidence showed that they shared the relevant markets, allocated territories and customers between them which may have easily adversely affected trade.
The agreement reportedly was that Micronclean Limited served customers north of a line drawn roughly between London and Anglesey, and Berendsen Cleanroom Services served customers located south of that line.
On top of that, they agreed not to compete for certain other customers irrespective of their locations.
As a result of the breaches, both companies are being issued fines by the CMA who are satisfied that both offending companies intentionally or negligently committed the infringements.
With the potential impact on the market plainly obvious, fines have been issued totalling £1.71 million.
CMA Senior Director for Antitrust Enforcement, Ann Pope, said:
“Market-sharing agreements are well established and serious breaches of competition law.”
“Organisations like the NHS rely on the cleanroom laundry services provided by these companies, but we have found the 2 biggest players were dividing customers between them, leaving those customers with very little choice in service provider.”
“Companies must regularly check their trading arrangements, including long-running joint ventures and collaborative agreements, to make sure they’re not breaking the law. The entry into new trade mark licence agreements in 2012 was an opportunity for the businesses to consider the competition law implications of their commercial arrangements.”
You can read more about the case investigation here: https://www.gov.uk/cma-cases/cleaning-services-sector-suspected-anti-competitive-arrangement-s