28th March 2019
The competitors – participants in a cartel in the galvanised steel tanks sector - invited Balmoral Tanks Limited, a tank design and manufacturing company, to a meeting. The Court of Appeal found that Balmoral knew or suspected that discussions at the meeting could stray into "problematic areas". This suspicion was well founded: Balmoral's representative was invited to join the cartel arrangement, which was sharing out customers and fixing prices.
Balmoral’s representative refused the invitation to join the cartel, but stayed at the meeting and participated in a conversation about pricing in which they revealed sensitive price information. The court found that the discussion went beyond talking about general market conditions and historic prices. The meeting was also secretly recorded by the Competition and Markets Authority (CMA), who promptly took action against both Balmoral and the participants of the cartel.
The CMA has now successfully fined a business for participating in only one meeting. It has since reminded businesses and company directors that, under competition law, the sharing and receiving of commercially sensitive information can be illegal, in particular discussions with competitors about prices, customers, territories, future plans and information not in the public domain.
The CMA confirmed it will use the “…full range of its powers to crack down on such illegal behaviour". It has recommended that employees should be trained to understand potential breaches of competition law; reject approaches at meetings to get involved in such behaviour; if necessary, leave meetings and report it internally and to the CMA. Companies and individuals that fail to do so could be deemed to be breaking the law, leading to fines and even criminal sanctions.
Even a one-off exchange of commercially sensitive and confidential information with competitors at meetings, industry association events or trade shows risks a breach of competition law.
For further information about this case, or for help and advice on dispute resolution issues, please contact David Patterson.