CMA Launches Construction Services Supply Investigation

FOLLOWING the prosecutions of five fit-out firms over bidding collusion’s, the Competition and Markets Authority (CMA) are now launching an investigation into the supply of construction services.

Last month Fourfront, Loop, Coriolis, ThirdWay and Oakley admitted to breaking competition law at least once during the period of 2006-2017, resulting in fines totalling £7million.

The CMA investigation found evidence that each of the five companies in competitive tenders, colluding on the prices they would bid for contracts. Typically, cover bidding involves companies agreeing with each other to place bids that are deliberately intended to lose the contract, thereby reducing the intensity of competition. This type of illegal behaviour can lead to customers paying an artificially inflated price or receiving poorer quality services. The cover bids exposed by the investigation affected 14 contracts with a variety of customers, ranging from a City law firm to a further education college.

The CMA has now announced its putting the construction industry under the spotlight as it investigates suspected anti-competitive arrangements in the supply of construction services.

Andrea Coscelli, the CMA’s Chief Executive, said: “The CMA is concerned it is seeing a lot of evidence of anti-competitive conduct in the construction industry, and we have already taken a number of cases in this sector.

“We will not turn a blind eye to illegal behaviour and we will take action where we find laws have been broken. This can include seeking disqualification of company directors.”

Any business found to have infringed the Competition Act 1998 can be fined up to 10% of its annual worldwide group turnover, and directors of the companies concerned can be banned from holding directorships for up to 15 years.

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