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19 November 2018

6 ways to protect your business from cartels

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New research from the Competition and Markets Authority shows that most firms don’t know much when it comes to cartels and what is, and isn’t, allowed under competition law.

As the CMA launches its latest cartel awareness campaign, here are six tips to protect your business:

1. Recognise illegal cartel behaviours
Recent research shows that nearly half of businesses thought they were allowed to agree prices with competitors and 48% thought competitors could discuss and agree which of them would win bids for new work, or didn’t know whether this was allowed or not. 59% thought market sharing – where competitors agree not to sell to the same customers – was allowed.  

2. Beware what you share
It’s natural to meet rivals in your sector, but if you find yourself talking shop, make sure you aren’t discussing sensitive information about your commercial practices. It might be tempting to discuss prices with rival businesses but it’s illegal to agree prices or even disclose pricing strategies. 

3. Make decisions independently
Cartels can occur when two or more competitors make decisions together, such as about what prices to charge, or who will win a bid, rather than competing against one another to give customers the best deal. 

4. Watch out for non-compliant rules from trade associations
Trade associations are useful for bringing businesses together, but they can also present risks where businesses come together under a common goal, which may lead to agreeing or coordinating how they go about things. At times, this may come direct from the association itself via its rules of membership. If you spot anything that doesn’t look right – such as the trade association asking you to share or discuss pricing strategies – flag it straight away.

5. Identify risks
Once you understand what the law says, look carefully at your business and identify areas where you might risk breaking competition law. The CMA has a handy 1-page checklist you can use to see where risks may exist. 

6. Report it!
Under the CMA’s leniency policy, the first company to report wrongdoing to us can apply for immunity from enforcement action, including fines and director disqualification. If you think you have information, report it by calling our hotline. The consequences if you are found to have broken competition law are not worth the risk.

Visit the CMA’s Stop Cartels homepage at gov.uk/stopcartels.