The Competition and Markets Authority (CMA) has sent advisory
letters to a number of firms, reminding them of their obligations
under competition law, after learning of allegations that some
suppliers colluded over the price of key services and equipment.
Price-fixing is a serious breach of competition law and can cheat
people out of a lower price, which could have been available if
competition was working properly.
Disabled students who are eligible can receive funding through
the Disabled Student Allowances grant scheme, managed by the
Student Loans Company (SLC), which acts on behalf of the UK and
Welsh governments’ education departments. Under the current
system, an independent needs assessor will provide SLC with
recommendations for products and services along with quotations
from suppliers, and SLC will work with the student to put the
support in place.
The CMA is concerned that SLC – and so ultimately the taxpayer –
may have paid over the odds for certain goods and services
because some suppliers agreed prices before providing quotations.
This alleged activity could also have reduced the overall amount
which disabled students have available for purchasing equipment
through the scheme.
While the CMA has been considering these allegations, SLC has
told the CMA that it is making a number of changes to the way it
procures goods and services for disabled students. The changes
will increase price transparency and competition amongst
companies, and should therefore limit the potential for
anti-competitive behaviour to take place.
Michael Grenfell, the CMA’s Executive Director of Enforcement,
said:
“Healthy competition is the cornerstone of getting the best deal
so we are concerned if companies might be doing something to
threaten that. It is particularly troubling in this case if the
interests of disabled students are affected, and if public
funding is hit.
“We trust that the letters we have issued, and today’s
announcement, send a clear message. Any suppliers engaging in
price fixing with competitors, or other illegal collusion, need
to review their practices and make changes now.”
The CMA has not made a legal finding as to whether competition
law has been broken at this stage, but it will keep this sector
under review, remaining open to the possibility of further action
if these concerns are not fully addressed.
The CMA runs a ‘Cheating or competing?’
campaign, which aims to educate businesses about which
practices are illegal and urges people to come forward if they
suspect a business has taken part in cartel behaviour, such as
rigging contracts or price fixing. It has also issued a range
of guidance to help businesses understand more about how to
comply with competition law.
Notes to Editor
- For more information on CMA advisory letters, what they are
and when they are used, look at the CMA’s Warning and Advisory
Letters page.
- The Students Loan Company provides funding to disabled
students through Disabled Students’
Allowances.
