London, 12 February 2004
Nine companies involved in the supply of laboratory equipment, glassware and chemicals have ended anti-competitive market-sharing arrangements.
The companies, which formed a group in 1999 to promote joint marketing and purchasing initiatives, had entered into agreements in 2001 and 2002 to divide sales leads between them on a geographic basis. The OFT was also concerned that the companies had co-operated to publish a joint sales catalogue that included prices.
The OFT became aware of the arrangements following an application by one of the companies under the OFT's leniency programme for cartels. The OFT decided not to take formal enforcement action against the companies because they chose not to implement the anti-competitive agreements and because of their small share of the sector for the supply of laboratory materials. The companies also terminated the agreements as soon as they were aware of the implications under the Competition Act. They have also undertaken not to publish such a price catalogue again.
John Vickers, OFT Chairman, said: 'Leniency arrangements help uncover cartels and are in the economic interests of UK consumers and business. As this case shows, they allow swift and proportionate action to bring anti-competitive agreements to an end.'
1. The Chapter I prohibition of the Competition Act 1998 prohibits any agreements between undertakings, decisions by associations of undertaking or concerted practices which may affect trade within the United Kingdom and have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom.
2. Penalties for infringing the prohibition can amount to up to ten per cent of an undertaking's UK turnover for each year of an infringement, subject to a maximum of three years. Under the leniency programme, members of cartels may apply to have their financial penalty reduced substantially, or avoid a penalty altogether, by providing the OFT with information regarding the existence and activities of the cartel.
3. Part 6 of the Enterprise Act 2002 introduces a criminal offence for individuals who dishonestly engage in cartel agreements. The cartel offence operates alongside the regime that imposes civil sanctions on undertakings that breach the Chapter I prohibition of the Competition Act. Individuals can be sent to prison for up to five years. Individuals who come forward with information about their involvement in a criminal cartel offence may be granted immunity from prosecution in the form of a 'no-action letter', issued by the OFT (see press release 36/03).
4. Copies of guidance on leniency arrangements under the Competition Act and the Enterprise Act can be downloaded from the publications section of this site or ordered by telephone from 0870 60 60 321.
5. The nine companies involved in this case are: Scientific and Chemical Supplies Ltd; Mackay and Lynn Ltd; R&J Wood; P&R Laboratory Supplies Ltd; Griffiths and Nielson Ltd; MJ Patterson (Scientific) Ltd; MRS Scientific Ltd; Lab-Plant Ltd; React Scientific
Office of Fair Trading, 26/04
Item source: http://www.oft.gov.uk/News/Press+release s/2004/26-04.htm
Office of Fair Trading, 26/04