In a previous news release, we drew attention to the fact that the Competition and Markets Authority (“CMA”) had observed that the construction industry was a fertile area for anti-competitive behaviour. The CMA has now fined five office fit-out firms £7 million for breaking competition laws.
The five – Fourfront, Loop, Coriolis, ThirdWay and Oakley – have each admitted to being involved in a cartel and have agreed to pay fines. A sixth firm, Jones Lang LaSalle Inc., was granted immunity as it acquired Bluu Solutions, another participant in the cartel in 2015, and then “blew the whistle”.
Each of the companies admitted to participating in “cover bidding” in competitive tenders, colluding on the prices they would bid for contracts. Typically such behaviour consists of competing businesses agreeing with each other to place bids that are designed to lose the contract so reducing the competition. The CMA observed that the cover bids affected 14 contracts with a range of customers, including a City law firm – but, of course, it would be wrong of us to speculate who may have tipped off the CMA!
The CMA has repeated its message that it is seeing a lot of evidence of anti-competitive behaviour in the construction sector and reminded businesses of its power to fine up to 10% of their group turnover and seek orders banning businessmen from acting as company directors for up to 15 years.