CMA to investigate anti-competitive behaviour among leading house builders

Oh dear! It seems as though the housing market is in the crosshairs of the competition authorities, after a year-long investigation. It also appears that the outcome of this is, in some senses, going to be straightforward.

The Times reports that "Eight of Britain's biggest house builders are to face a fresh investigation from the competition regulator amid concerns that they are working together to limit the supply of new homes and to keep their prices high."

Any evidence of information normally results in firms being found guilty of anti-competitive behaviour, and factor in the additional concerns with management fee charges, shortfalls in the number of houses being built and poor quality housing and it's clearly not good news for house builders.

More here from the Guardian: UK housebuilders investigated over possible sharing of price information

Sharing information among competitors can potentially lead to anti-competitive behavior for several reasons:

1. Collusion: When competitors share information about prices, production costs, or other competitively sensitive information, it can facilitate collusion or coordination, allowing them to fix prices, divide markets, or engage in other anti-competitive practices that harm consumers.
2. Reduced competition: Information sharing can reduce the incentive for companies to compete aggressively on price, quality, or innovation, as they may choose to follow their competitors' strategies rather than differentiate themselves. This can result in higher prices, reduced consumer choice, and less innovation.
3. Barriers to entry: Information sharing can create barriers to entry for new competitors, as established firms may use shared information to create exclusive networks, set industry standards, or engage in other practices that make it difficult for new entrants to gain a foothold in the market.
4. Information asymmetry: Information sharing can create information asymmetry, where some market participants have access to more or better information than others. This can disadvantage smaller firms, suppliers, or consumers, who may struggle to access the same level of information as their larger or more established counterparts.