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Newsflash: Water tank manufacturers fined for breaching competition law

19 December 2016

The UK Competition & Markets Authority (CMA) has today issued a decision against a number of suppliers of water tanks used in sprinkler systems, finding that the suppliers had infringed competition law by (among other things) agreeing to fix prices, rigging tender bids as well as sharing commercially sensitive information.

As part of the decision, fines totalling over £2.6million have been levied against the manufacturers

The investigation has been ongoing since dawn raids took place in 2012 that resulted in directors of the various companies being prosecuted for the criminal cartel offence. The criminal trial of the alleged conspirators led to acquittals of two directors with a third person pleading guilty and receiving a suspended sentence. The CMA then proceeded with its civil investigation.

While the fines are large (as is often the case with cartel decisions), perhaps the most striking part of the decision is that one of the businesses, Balmoral, has been fined £130,000 for participating in an information exchange agreement. 

Balmoral attended just one meeting where it was asked to join the cartel. It shared some commercially sensitive information but refused to take part in the cartel. Despite refusing to join the cartel and having only attended one meeting, the CMA has still found it liable and imposed a very significant fine

The salutary lesson for all businesses is that they should be aware of competition law, and if they are approached by their competitors, or find that their directors or employees have been talking to competitors, they may be in breach of competition law and may need to act immediately and decisively to distance themselves from the conduct. 

Lewis Silkin advised three related parties to the investigation. If you have any competition law queries, please contact Adam Glass.

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