TupperS Law

Demolition Services Investigation

Case Studies
2 May 2024

CMA reduces fine in alleged bid-rigging case

The Background

Squibb, a player in the UK’s demolition and asbestos removal industry, found itself under the microscope alongside nine other companies in a major probe by the Competition and Markets Authority (CMA) for alleged bid-rigging activities. Initially, the company was guided by another law firm, but concerns about their conservative approach led them to seek out TupperS Law.

In the middle of 2022, the CMA issued a formal "Statement of Objections" – essentially an official accusation document – claiming Squibb had engaged in cover pricing in two instances. The proposed penalty? A hefty fine running into several million pounds. Our team jumped in, crafted a series of detailed defences and persuaded the CMA to cut the fine by more than 30% – a significant reduction, though still a tough pill to swallow.

The Investigation

This investigation wasn’t a quick or quiet affair; it stretched over four long years, becoming well-known within the construction sector. The mere hint of anti-competitive behaviour cast a shadow over all involved firms, impacting their business operations significantly. Although Squibb was largely a peripheral figure in the alleged cartel activities, which were centred on high-profile demolition contracts in the City of London (not a market that Squibb was equipped to compete in given the uniqueness of the location), its reputation suffered just as much as the central players.

The Appeal

By 2022, eight of the ten investigated companies chose to settle and admit their wrongdoings. Squibb, acknowledging its minor role in the affair, conceded some level of fault but contested the size of the fine, arguing it was disproportionate given their limited involvement and challenging business conditions exacerbated by the investigation itself.

In April 2023, Squibb appealed the decision. Regrettably, the ongoing financial strain, compounded by their damaged reputation and challenging market conditions, led to Squibb facing insolvency and eventually entering receivership later that year.

Lessons Learned

Often the level of the fines imposed for serious anti-competitive conduct attract all of the attention. This is understandable given the eye-watering numbers regularly being levied, but the broader impacts—the drain on resources, the reputational harm, the operational disruptions—can be just as devastating, if not more so. Squibb’s story is a cautionary tale about the ripple effects of competition regulation scrutiny; it’s not just the final penalty but the entire journey through the investigation process that can challenge the survival of a business, especially a small, family-run firm like Squibb.