CMA blog on cartels in the construction industry

 

The Competition and Markets Authority has published a blog on cartels in construction.

The blog comes as a reminder to the construction sector of the importance of competition law compliance.  It also sends a sharp message to directors of construction firms to lead by example and be aware of how the company is complying with its competition law obligations.

 

The competition law scrutiny of the construction sector is well documented. The CMA has  imposed competition law penalties of £67 million in the last five years in cases involving concrete drainage, groundworks, office fit-out services, galvanised steel tanks and roofing materials.  The CMA has also secured disqualification of 11 directors for their involvement in competition law breaches.  In the concrete drainage cases, two directors were disqualified for 11 and 12 years being the longest periods that the CMA has secured for disqualification up to now.  The company received fines of over £25 million.

 

The sector has been plagued by competition law problems in the past.  The CMA hopes that by engaging directly with businesses to remind them of their obligations will bring the message home.

 

Cartels in construction – CMA message for business leaders - Competition and Markets Authority (blog.gov.uk)

European Commission fines railway companies in cargo cartel

 

European Commission fines railway companies in cargo cartel

The Commission has imposed penalties of around EUR 50 on Deutsche Bahn (DB) and Société Nationale des Chemins de fer belges / Nationale Maatschappij der Belgische Spoorwegen (SNCB) for a customer allocation cartel in relation to rail cargo, contrary to Article 101 TFEU.

This is the 35^th cartel settlement since the first settlement decision in May 2010.

DB received a 50% increase in the fine for recidivism.

The Commission found that over a 6 year period the companies exchanged confidential information on customer requests and provided each other with higher quotes.

The companies have denied that customers suffered any damage as a result of the conduct, possibly with an eye on mitigating future claims in private enforcement actions.

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1843

CMA provisionally clears Virgin Media/O2 joint venture

 

The CMA has provisionally cleared the proposed joint venture between Liberty Global plc and Telefónica SA to merge their UK operating businesses Virgin Media/Virgin Mobile and O2.

The CMA has concluded that the JV will not give rise to a substantial lessening of competition, including in relation to possible vertical effects.  It found in relation to wholesale mobile services to mobile virtual network operators (MVNOs) in the UK that there are a number of other companies that provide such services.

The CMA has found that the merged business would have neither the ability nor the incentive to engage in total or partial foreclosure. Given Virgin Mobile’s modest market share, the CMA ruled out concerns in retail markets.

Reportedly, there was a high level of cooperation between the CMA and the European Commission in this case notwithstanding Brexit.

The CMA invites comments on its provisional findings by 5 May 2021. The CMA must conclude its Phase 2 investigation by 27 May 2021

https://www.gov.uk/government/news/cma-provisionally-clears-merger-of-virgin-and-o2

Digital Markets Unit Shadow Launch

 

Digital Markets Unit Shadow Launch

 

The new Digital Markets Unit (DMU) has begun work within the CMA, albeit in a ‘shadow. non-statutory form.

Following the Furman Review, the government announced in November 2020 that the DMU would be established to oversee digital platforms with a strategic market position.  The government intends to consult on the design of the regime in the first half of 2021.

Before legislation puts the DMU on a statutory footing, it will work on:

·        carrying out preparatory work to implement the statutory regime;

·        supporting and advising government;

·        evidence-gathering on digital markets;

·        engaging stakeholders across industry, academia, other regulators and government, and internationally.

The CMA, DCMS, BEIS and HM Treasury will agree a work plan.  The ICO, Ofcom and the FCA will join this forum when required.

The launch of the DMU ahead of legislation shows that the CMA wants this body to have credibility even before it gets its full powers.  There is a recognition that these are dynamic markets where ‘just in time’ intervention may be warranted.  It is unclear clear what role the DMU will have in mergers.

https://www.gov.uk/government/news/new-watchdog-to-boost-online-competition-launches--3