‘Cartels are both harmful and illegal’

Whistleblowers are being offered up to £100,000, as the Competition and Markets Authority (CMA) launches its first-ever advertising campaign to crack down on cartels.

The CMA is targeting illegal cartels – businesses which cheat their customers by agreeing not to compete with each other in order to keep their prices high. The practice stops ordinary people and other businesses from getting a fair deal as well as stifling competition.

The CMA’s campaign, ‘Cracking down on Cartels’ will encourage people who have witnessed illegal activity to report it by offering a reward of up to £100,000 as well as promising them anonymity.

Meanwhile, under the CMA’s leniency scheme, firms can avoid penalties of up to 10% of their total turnover and prison sentences of up to five years for staff if they are the first to confess their cartel.

Andrea Coscelli, acting chief executive, said, ‘Cartels are a form of stealing that cheat ordinary people as well as other businesses by undermining competition, and we are committed to tackling them wherever we find them. Cartels are carried out in secret to make you think you are getting a fair deal, even when you are being conspired against to keep prices high.

‘Cartels are both harmful and illegal, and the consequences of breaking the law are extremely serious. That is why we are launching this campaign – to help people understand what cartel activity looks like and how to report it so we can take action.’

CMA research found that, while most businesses have a shared ethical sense that conduct such as price-fixing is unfair or wrong, less than a quarter said they knew competition law well. Further, only 16% knew that informants could get a reward for reporting a suspected cartel, and only 15% knew that the CMA operates a leniency programme for businesses and individuals that confess their involvement in a cartel and cooperate with the CMA.

Cartels have been uncovered in a range of industries and the campaign builds on recent CMA cartel cases. These have included fining two furniture parts-makers £2.8m for agreeing not to compete on price and who would supply which customers, following a tip-off from an informant, fining four estate agents a total of £370,000 for price-fixing, and disqualifying the managing director of an online poster supplier for five years after his company was found to have been part of an online price-fixing cartel.