CMA investigating UK roofing materials sector for alleged anti-competitive arrangements
First published by Admin on October 13, 2017 in the following categories: Investigations and tagged with cma
The Competition and Markets Authority (CMA) have opened initial investigations into the UK roofing materials sector.
At this point in the very preliminary investigations, no presumption of infringement has been made: “The CMA has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objection to any of the parties under investigation.”
What the CMA will probably do at this stage is conduct investigations and carry out information gathering; which includes issuing formal or informal information requests where necessary .
What happens next?
Those who are co-operative and provide requested information to the CMA should find that the investigations will go a lot more smoothly; including if it leads to an infringement being found. The CMA has very merciful leniency policies that can see liable parties receive proportionately smaller sanctions if they co-operate fully.
If any business has engaged in anti-competitive behaviour, now would be the time to own up to it. The CMA has the ability to issue millions of pounds worth of fines, but they can also spare businesses if they come forward quickly and work with the CMA to identify any wrongdoing.
It can often be a case of which of the perpetrators is prepared to come forward and confess about what’s being going on the quickest!
Suspicions of “anti-competitive arrangements”
The CMA has not provided a great deal of information; only that they are investigating the U.K. roofing materials sector on suspicions of “anti-competitive arrangements”.
Anti-competitive arrangements can include all sorts of agreements that restrict, prevent or distort competition.
Some of the most common ones include:
- Price fixing – many businesses have been found to have breached competition laws by agreeing with a competitor to fix their prices so neither will feel the need to reduce their prices to look more attractive to the consumer. Using this method, customers may not be able to find a cheaper price and participating businesses will profit from the fixed prices and share the market;
- Limiting production in order to drive up demand – this way businesses can increase profits because they know people will still want to purchase them;
- Agreements over sharing sources of supply;
- Agreements to share markets or customers;
- Fix prices vertically (between a producer and a distributor).
The first two methods are usually used in cartels. Unlike the usual perception of a cartel, drugs, guns and violence are not what we’re talking about here. Cartels are any group of competitors joining together or entering into agreements that may fix or increase prices for the profit of the participants, and at the expense of consumers and other non-participant competitors.
Cartels are strictly forbidden by U.K. and E.U. legislation as they usually harm competition in the sector.
The importance of healthy competition
Competition is extremely important to ensure:
- Value-for-money for consumers;
- Expansion of choices;
- Innovation of new and better products;
- Helping smaller and new businesses enter the market.
In December, the CMA will decide whether there is sufficient evidence of infringement to continue their investigations, or close the investigation.