Regular readers will recall that the Competition and Markets Authority previously investigated the suspected sharing of commercially sensitive information between housebuilders, and that that investigation was concluded by the CMA accepting commitments from the housebuilders without any finding of a breach. We blogged here about the investigation and the commitments at the consultation stage.
One of those commitments was to support the Home Builders Federation and Homes for Scotland in creating guidance on information sharing for use by the industry. That guidance is now available here. Information exchange can be a tricky area of competition law in terms of understanding exactly where the ‘line’ is, so housebuilders should ensure they review and understand the guidance.
There may nevertheless be grey areas for certain businesses on questions such as whether information is commercially sensitive, whether it can or should be shared with a particular party (including trade associations and other non-competitor third parties), and what is and isn’t acceptable in terms of joint bidding, ‘benchmarking’ and similar initiatives. Our competition team can help with any difficult questions that arise, and can also offer training and other support to ensure competition compliance is understood and embedded throughout your organisation.
It is essential to be aware of the severe potential consequences of breaching competition law, including fines of up to 10% of worldwide group turnover, director disqualification, criminal prosecution (in the most serious cases) and damages claims by aggrieved customers or competitors. The latter risk is illustrated by the announcement, earlier this year, that a collective action is being planned against the seven housebuilders who were the subject of the CMA investigation. Unlike many class actions, which can ‘follow on’ from a CMA finding of a competition law infringement, the claimants would need to prove that there was in fact a breach. Regardless of the outcome, however, defending the litigation will be very costly in terms of both money and time – emphasising the importance not only of actually complying with competition law but of being able to demonstrate compliance if challenged.
To hear more about recent developments in competition litigation, and understand its importance from a compliance perspective, sign up to the Scottish Competition Forum event we’re hosting on 19 May – details and registration link here.
Contributors
Legal Director
Partner
