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Competition Appeal Tribunal upholds fine for illegal information exchange - a reminder for the Chemicals Industry

  • United Kingdom
  • Diversified industrials - Chemicals


Recently the Competition Appeal Tribunal (“CAT”) upheld the Competition and Markets Authority’s (CMA) decision to fine Balmoral Tanks Ltd (“Balmoral”) for illegally exchanging price information with competitors, despite Balmoral having refused to participate in the price fixing cartel.

This decision follows on from the European Commission’s activities earlier in the year where it carried out unannounced inspections at the premises of companies operating in several Member States that trade in ethylene.

The CAT’s decision serves as a reminder that companies within the industry need to remain alive to the risk of possible infringement, and to businesses and individuals who are invited to participate in a cartel that: 

  • exchanging commercially sensitive information such as prices, even if it is only at one meeting, can amount to a breach of competition law with severe consequences;
  • a business that is approached to join a cartel or become involved in anti-competitive conduct, such as exchanging prices or sharing markets between them, must immediately reject the approach in a clear and unequivocal manner. The business’ representatives must leave the meeting, and make their refusal to participate in the conduct clear and explicit; and
  • the business must decline to participate in any discussions involving the exchange of commercially sensitive pricing information.


On 19 December 2016, the CMA announced the outcome of its civil investigation into the long-running cartel arrangement between all UK suppliers in the cylindrical galvanised steel tanks (primarily used in sprinkler systems for fire suppression) market. Balmoral, along with three other businesses, were found to have breached competition law by taking part in an exchange of competitively-sensitive information on prices and pricing intentions.

Balmoral was fined £130,000 for taking part in the unlawful information exchange. The CMA investigated Balmoral’s participation at a single meeting in July 2012 at which Balmoral was invited to join the long-running price-fixing cartel. Balmoral refused to join the cartel, but was found to have exchanged commercially sensitive information at the meeting which was secretly recorded by the CMA. The CMA has suggested that the fine imposed on Balmoral was relatively low, taking into account a number of factors including Balmoral’s refusal to join the cartel arrangement and, its significant co-operation in the CMA’s civil and related criminal investigation.

In February 2017 Balmoral lodged an appeal with the CAT to challenge the CMA’s decision.

The Appeal

The CAT applied case law which establishes where the line is to be drawn between innocuous discussion and infringement, finding unanimously that Balmoral’s conduct amounted to an infringement. It was found not to be a situation where Balmoral’s representative was a passive recipient of information, as Balmoral’s prices were provided and its representative directly asked another at the meeting in question to state the price quoted for a particular contract.

The CMA had concluded that Balmoral’s representative had “made it clear during the meeting that he did not want to participate in the customer allocation arrangements between the parties” but some comments showed an objective to stabilise prices towards “the higher end of the bands being discussed at the meeting”. The CAT agreed that this was an accurate and fair conclusion to be drawn, and the fine was considered to be appropriate in the circumstances. As such, Balmoral's appeal was dismissed.


The case highlights that any form of information exchange is potentially anti-competitive. It acts to remind all businesses of the serious consequences of breaching competition law and how easily a breach can arise. The CMA’s guidance and the case demonstrates that it is not enough to refrain from price-fixing or market-sharing, but rather any business that is approached to become involved in an anti-competitive arrangement must immediately, clearly and unequivocally reject the approach, and avoid exchanging commercially sensitive information.

The sector will also be aware of previous enforcement action on this issue, for example: in 2009 the European Commission imposed a fine totalling €173 million on 24 companies which operated a cartel in the plastics additives sector. In addition, in 2006 four chemical groups were fined €334.6 million for operating a cartel for Plexiglas and other acrylic glass products. This demonstrates how the power to impose fines for competition related infringements can have a huge financial impact on businesses within the chemicals sector across the European Union.

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