Price fixing investigations
Cartel and price-fixing investigations are often brought by the Competition and Markets Authority (CMA) or the Serious Fraud Office (SFO). We know how to deal with these institutions and understand their mindset. With this knowledge, we are able to contest issues that arise, where appropriate.
We aim to protect and preserve our clients' interests at all stages of any investigation. We are able to deal with the large volume of paperwork that is often created in the investigations and have the ability to analyse the relevant data quickly and efficiently.
It is essential that legal advice is obtained as early as possible in cases of this type. If convicted of offences of this nature, the penalties can be severe; including potential imprisonment for up to five years. You may also be fined and become the subject of a confiscation order. We understand the need for discretion in this highly sensitive area and that business and individual reputations are at stake.
Our experienced team of fraud lawyers have the expertise and knowledge to go into the required level of detail to defend your case. Contact our expert fraud solicitors on 01616 966 229 or complete our online enquiry form.
Price fixing and Cartels FAQs
What is price fixing in business?
Price fixing laws and anti-cartel laws are there to protect consumers. Price-fixing is generally considered to be taking place if businesses who normally compete against each other agree in any way to rise, lower, or stabilise prices, or come to an agreement for competitive terms. This behaviour usually goes against anti-competition and anti-trust laws.
Why is price-fixing illegal?
Price fixing is illegal because it goes against anti-competition and anti-trust laws. In most cases it is not good for consumers and, in the vast majority of cases, involves higher prices. An agreement between competitors to fix prices or restrict competition is almost always illegal. According to the UK Government, if two or more businesses collude to fix, raise, reduce or stabilise prices this is considered price-fixing.
However, indemnifying illegal price-fixing is not as easy as it looks as it can also resemble market conditions. For example, if one shop sells bread for £1 then another one undercuts them by selling the same loaf for 90p and then the first shop cuts their prices to 90p, that is not necessary price-fixing but healthy market competition. Price-fixing laws come in if the two shops have agreed on the price of 90p.
Illegal price-fixing in the UK carries with it a fine of up to 10% of the business’ worldwide turnover and those involved could be fined and face a prison sentence of up to five years, if found guilty. If you are a company director found to be involved in price-fixing, you can end up being disqualified for up to 15 years.
However, it is possible, if your business if the first to come clean that you may avoid any possible penalties.
What does price-fixing involve?
Price fixing involves two or more competitors agreeing to set a certain price for the same service or product. This agreement does not have to be in writing, it can be verbal, a ‘gentleman’s agreement’ or inferred from conduct. Price fixing can also include:
- Contract rigging
- Bid rigging
- Slicing up the market between competitors
- Sharing commercially sensitive information
- Market abuse
- Market manipulation.
Price fixing laws are there to protect consumer choice and to ensure they can shop around for the best deal in the market.
What is insider trading and price-fixing?
Insider trading is illegal under the Criminal Justice Act 1993. If the person who has insider knowledge uses that information to manipulate or abuse the market, that is also illegal. Price-fixing can be a result of insider trading and market abuse.
What are cartels?
Businesses who collude to fix prices, share commercially sensitive information, bid rig or slice-up the market between them, are called business cartels. Being part of a business cartel is illegal as it goes against competition and anti-trust laws. Companies and individuals from a cartel can face a hefty fine and a possible prison sentence, as well as disqualification from being a director.
If you or your business are under investigation for price-fixing or for being part of a business cartel then you will need expert legal advice from our business crime solicitors. Part of the Legal 500, our expert solicitors can offer legal advice and representation for price-fixing and cartel cases.