Businesses have a responsibility and a legal obligation to follow competition law as laid out in the Competition Act 1998. In recent years, many large companies have been fined for involvement in cartels, and it is important for businesses to be aware of the dangers and pitfalls to avoid falling foul of the law, and racking up eye-watering fines which could run up to 10% of revenue.
What is a cartel?
A cartel is an agreement between competitors which results in anti-competitive activities. This could include an agreement to fix prices, share markets, rig bids or limit output at the expense of the interests of customers and without any countervailing customer benefits. They increase prices by removing or reducing competition which results in increased prices for customers. They have a corrosive effect on the wider economy, as they reduce the incentive for businesses to operate efficiently, innovate, and provide the best value for money for consumers. Cartels lead to higher prices, poorer quality, and restricted or no choice.
