House building giants agree to £100m ‘fine’ after collusion allegations
Seven firms have probably avoided a much bigger fine by reaching a deal with the Competition and Markets Authority over anti-competitive practices.
Major housebuilders have agreed to pay a £100 million ‘fine’ after allegations they colluded to fix prices.
The cash, which will initially go to the Competition and Markets Authority (CMA), will be used to fund affordable housing projects.
The seven developers – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – have also agreed to legally binding commitments to prevent anti-competitive behaviour.
Accusations
The CMA launched an investigation into accusations the companies were guilty of exchanging details about sales including pricing, the number of property viewings and incentives offered to buyers, such as upgraded kitchens or stamp duty contributions.
The building firms have agreed not to share certain types of information with other housebuilders, including the prices houses have been sold for, except in limited circumstances.
They will also work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.
Clear message
This outcome sends a clear message to other companies that the CMA will take action where it has concerns that the law is being broken, the CMA says.
Sarah Cardell, CEO at the CMA, says: “As a result of the CMA’s investigation, housebuilders are taking clear and comprehensive steps to ensure they comply with the law and don’t share competitively sensitive information with their rivals.
“Alongside these measures, the housebuilders we investigated have agreed to pay £100 million towards affordable homes programmes, which will help communities up and down the country.”
This is a case of wrists slapped, line drawn and move on.”
Anthony Codling, MD of Equity Research at RBC Capital Markets, says: “In our view this is a case of wrists slapped, line drawn and move on.
“The government is keen to get more homes built, therefore slapping housebuilders with a big fine would not help grow volumes, and housebuilders themselves want to sell more homes”.
Alleged anti-competitive behaviour by major housebuilders
