As we mentioned here, the Competition and Markets Authority (the “CMA”) stepped up its enforcement activity significantly in 2016, and its annual plan for 2017/18 indicates that it will continue to do so, for example by increasing its annual target for opening new civil competition enforcement cases by 50%. The CMA has also emphasised that it intends to carry on tackling smaller cases as well as larger ones, stating in its annual plan that: “We continue to seek a balanced portfolio of cases, including large cases that have wider impact and smaller, more local, cases that send the message that no business is beyond the reach of competition enforcement.”
In a recent example of enforcement against small businesses, in March 2017 the CMA announced that four Somerset estate agents had agreed to pay fines of over £370,000 in a recent cartel case. The estate agents admitted that they colluded to set minimum commission rates for residential property sales at 1.5%, in order to prevent residential sellers from being able to secure a better deal from another agent. This price fixing arrangement, which began in February 2014 and lasted just over a year, amounted to an infringement of competition law. The estate agents involved agreed to a settlement with the CMA. One of the agents, which was the first to inform the CMA of the existence of the cartel, will not receive a fine as long as it continues to cooperate. This follows an earlier case in which an estate agent association, its members and the publisher of a local newspaper were fined.
In light of the above, it would be prudent for businesses to review their competition compliance arrangements and put in place a compliance programme if necessary. Some benefits of implementing competition compliance programmes include:
- avoiding infringements;
- being in a position to effectively deal with issues that do arise;
- mitigating risks of director or management liability; and
- potential reduction in penalties.
Do get in touch with our competition team if you would like any assistance with competition compliance.
Gustaf Duhs