The construction industry has been under the watchful eye of the United Kingdom’s Competition and Markets Authority (CMA) in recent times and there have been a number of high profile fines and director disqualifications. For example: 

• The CMA has fined 10 construction firms a total of nearly £60 million in March 2023 for illegally colluding to rig bids for demolition and asbestos removal contracts involving both public and private sector projects. The CMA has also secured the disqualification of three directors of firms involved in the unlawful conduct (see here). Parties fined: Brown and Mason (£2,400,000), Cantillon (£1,920,000), Clifford Devlin (£423,615), DSM (£1,400,000), Erith (£17,568,800), JF Hunt (£5,600,000), Keltbray (£16,000,000), McGee (£3,766,278), Scudder (£8,256,264), and Squibb (£2,000,000).
• The CMA fined Vp and MGF, who supply groundworks products, a total of over £15 million in 2020 for illegally sharing confidential information relating to current and future pricing and coordinating their commercial activities to reduce strategic uncertainty (see here).
• On 17 October 2023, the competition authorities in the European Union, United Kingdom, Turkey, and United States confirmed that they carried out parallel dawn raids (surprise inspections) at the premises of companies active in the supply of chemicals for use in the construction industry, such as admixtures and additives for use in concrete, cement, mortars, and related construction products. 

WHAT IS IT ABOUT?

• The most recent investigations, which occurred in October 2023, are based on the suspicion that the chemicals companies have engaged in illegal cartels. 
• Because the investigations are still in their early stages, the authorities have not yet officially disclosed the identities of the investigated companies. However, a number of major construction chemicals producers have already made public statements confirming they have been raided and are cooperating. We understand that some trade associations may also be targeted in these investigations. 
• The fact that dawn raids have taken place implies that the competition authorities have sufficient information about the alleged cartel conduct to have commenced the investigations. It is often the case that such intelligence is provided to the authorities following a tip-off from a whistleblowing customer, competitor, or disgruntled employee who has been involved in, or impacted by, the practice of which was complained. Cartel members (and in some countries, individuals) are incentivised to blow the whistle to receive immunity from large fines and criminal prosecution. 

WHY IS IT OF INTEREST?

• As part of their investigations, the competition authorities may reach out to relevant suppliers, customers, and competitors in the sector with formal mandatory requests for information.
• Interested parties, or companies who hold relevant information, may also voluntarily come forward to the competition authorities and provide any further background or evidence. 
• In addition, where competition law is breached, any harmed party may bring a private claim for damages against the cartelists:
  
  • Customers who have bought concrete, cement, etc. (whether directly or indirectly) that included the cartelised chemicals may have been overcharged, and might be entitled to bring a claim for damages. 
  • Third party entities, who are not direct or indirect customers of the cartelised product(s) but who may also have suffered damage due to the effect that the cartel may have had on market(s) where such entities are present, may also have a right to bring a claim for damages. This right of so-called “umbrella plaintiffs” to sue the cartel participants is long-established and has been confirmed in cases such as Otis GmbH and Others (which can be read here). 
  • In fact, the European suppliers of construction chemicals who were on the radar of antitrust authorities in October 2023 are now all facing a class action damages claim in the United States over the alleged price fixing, which is said to have affected a wide range of market players in the construction industry. The claim was initiated by a general contractor supply company.