£11.2 million fine for Vp
The UK’s Competition and Markets Authority has announced the findings of its four year investigation into a breach of competition law by three rental companies offering groundworks products - Vp, M.G.F (Trench Construction Systems) and Mabey Hire - which has resulted in a fine of £11.2 million for rental group Vp. Mabey Hire was not fined as it reported the collusion to the Authority, while M.G.F was fined £3.7 million.
Vp accrued £15.4 million in its accounts to cover the cost of the expected fines and legal fees to cover the infringement – essentially a price fixing ring – by its Groundforce Shorco division, which only represents nine percent of group revenues.
A statement from the company said: “Vp fundamentally disagrees with the conclusions of the CMA and based on the board's current view of the information available it is our intention to appeal to the Competition Appeal Tribunal.”
“Notwithstanding, the group's view of the merits of the CMA's findings, Vp has always prided itself on conducting its business fairly and ethically. The board is committed to ensuring that our policies and procedures are adhered to by all Vp employees.”
The Authorities announcement stated: “The CMA found that the companies colluded illegally to reduce competition and maintain or increase prices. This involved sharing confidential information on future pricing and commercial strategy. They also coordinated their commercial activities to reduce uncertainty, including monitoring each other’s prices and challenging quotes they deemed too low.”
“The CMA has found that illegal collusion between Vp and M.G.F. lasted for periods totalling nearly two years, and a third groundworks company, Mabey Hire, took part for a single period of five months. Mabey has not been fined as it brought the illegal activity to the CMA’s attention and fully cooperated with the investigation, under the CMA’s Leniency Programme.”
The CMA offers a wide range of advice and support on this subject which can be accessed online: www.gov.uk/government/collections/competing-fairly-in-business-advice-for-small-businesses