The Competition and Markets Authority of the United Kingdom, which operates similarly to the Securities & Exchange Commission in the United States, is investigating three major suppliers of groundworks products to the construction industry for what it believes to be anti-competitive practices. The CMA has provisionally found that the three businesses formed a cartel to reduce competition and keep prices up. The website Gov.UK said this involved sharing confidential information on pricing and commercial strategy and coordinating their commercial activities.
The three companies are M.G.F. (Trench Construction Systems) Ltd., Vp plc and Mabey Hire Ltd. The CMA stated its provisional view that Vp and MGF operated the cartel for nearly two years and Mabey took part for a single period of five months.
Groundworks products, the website explains, including braces, props and sheeting, are used to protect excavations – such as those made for foundations or for laying pipes – from collapse and are important for keeping construction sites safe. The three companies supply these products for a range of major housing and road developments, railway line works and water pipe upgrades.
Gov.uk said the companies’ behavior came to light after one of the firms, Mabey, blew the whistle and brought information about the conduct to the CMA’s attention. Mabey has confessed its role and will not be fined in accordance with the CMA’s leniency program, provided it continues to co-operate with the CMA’s investigation.
“These are three major suppliers of equipment used to keep construction workers safe,” said Michael Grenfell, CMA’s executive director for enforcement. “It is crucial that builders and their customers benefit from genuinely competitive pricing for this essential equipment. Everyone must follow competition law, which protects customers from being exploited and paying more, as well as encouraging companies to compete for business in other ways – through innovation, quality and service.”
Grenfell added that the CMA’s finds are provisional at this stage in its investigation and do not necessarily lead to a decision that the companies have breached competition law. Vp stated that it is cooperating fully with the CMA’s investigation.