The Competition and Markets Authority is beefing up its enforcement work against illegal cartels and offering a reward of up to £250,000, increased from £100,000, to people who whistleblow unlawful cartel activity.

The authority says illegal cartels – businesses which cheat their customers by agreeing not to compete in order to keep their prices high – stop people and other businesses from getting a fair deal as well as stifling competition. It adds that businesses that participate in cartels, knowing them to be illegal and a cheat on their customers, often go to great lengths to keep the cartel hidden and secret. This makes them difficult to detect, and so harder to bring to an end.

In recent years the CMA has taken action against three examples of anti-competitive practice in the property sector and in September last year it issued a warning to all companies, giving the example of five Somerset estate agencies fined over £370,000 after they all fixed their minimum commission rates at 1.5 per cent 

Now the CMA’s ‘Cheating or Competing’ campaign has advice for people and businesses to help them spot, report and deter illegal anti-competitive practices. It encourages people who have witnessed illegal activity to report it by offering a reward as well as protecting their anonymity.

The CMA also has a range of guidance on its website to help businesses and directors understand more about how to comply with competition law.

Businesses found to have been involved in illegal cartels can be fined up to 10 per cent of their annual turnover, individuals directly involved can face up to five years in prison, and company directors can be disqualified from holding director positions for up to 15 years.

The reward is separate from the CMA’s leniency programmes where a business or an individual that has participated in a cartel may escape sanctions if they come forward with information about the cartel, provided certain conditions are met.

Michael Grenfell, executive director of enforcement at the CMA, says: “Cartels can cause serious damage to their customers, whether businesses or individual people, weakening price competitiveness – a particular concern at a time of cost-of-living pressures.

“The CMA’s job is to stamp out illegal cartels, but because cartels are generally conducted in secret, we need to encourage people to come forward and provide us with the information we need to crack down on cartels and protect people and businesses from the harm they cause. For these reasons, we are today increasing the maximum financial reward for informants and whistle-blowers who provide us with valuable information about cartels so that we can take action.”