Laundry firms fined £1.71m for breaching competition law

Two laundry firms have been fined a total of £1.71m after they agreed not to compete against each other in certain areas.

Micronclean Limited and Berendsen Cleanroom Services Ltd provide specialist laundry services including the cleaning of garments worn by people working in ‘cleanrooms’. These are highly sanitised environments used by businesses such as pharmaceutical and medical device manufacturers, as well as NHS pharmacies.

In May 2012, the companies entered into reciprocal trademark licence arrangements under which they agreed not to compete against each other.

Under the agreement, Micronclean served customers in an area north of a line drawn broadly between London and Anglesey, and Berendsen Cleanroom Services Limited served customers located south of that line. The companies also agreed not to compete for certain other customers, irrespective of their location.

Market-sharing arrangements like these are generally illegal under competition law.

Following an investigation by the Competition and Markets Authority, Micronclean was fined £510,000, and Berendson was fined £1,197,000.

Ann Pope, CMA Senior Director for Antitrust Enforcement, said: “Market-sharing agreements are well established and serious breaches of competition law.

“Organisations like the NHS rely on the cleanroom laundry services provided by these companies, but we have found the 2 biggest players were dividing customers between them, leaving those customers with very little choice in service provider.

“Companies must regularly check their trading arrangements, including long-running joint ventures and collaborative agreements, to make sure they’re not breaking the law. The entry into new trade mark licence agreements in 2012 was an opportunity for the businesses to consider the competition law implications of their commercial arrangements.”

Please contact Simon Porter if you would like more information about the issues raised in this article or any aspect of competition law and business regulations.