OFT makes 'fast track' offer in biggest ever UK cartel investigation

49/07 22 March 2007

The OFT is today looking to fast track its current bid rigging cartel investigation in the construction industry, by making an offer of reduced financial penalty to all those implicated companies that have not so far applied for leniency but are willing to cooperate with the OFT in certain specific ways.

Over the last two years the OFT has been carrying out an investigation into bid rigging by construction companies in England, and during this investigation 57 companies have been raided, and 37 companies have applied for leniency. As a result of the investigation, the OFT has uncovered evidence of bid rigging in thousands of tenders with a combined estimated value approaching £3 billion.

Construction companies throughout England are now informed that in view of the extent and the quality of the evidence obtained by the OFT so far, no further applications for leniency in this investigation are being considered. Construction companies could therefore face significant financial penalties for cartel behaviour, without the prospect of any reduction for leniency. For more information on these penalties visit the cartels area of this website.

Any business found to be part of a cartel could be fined up to 10 per cent of its worldwide turnover. Under the OFT's leniency programme, members of cartels may have their financial penalty reduced substantially or they may be able to avoid a penalty altogether. The OFT has today written to businesses that are a suspect party in the cartel investigation but have not so far applied for leniency, and has notified these companies that it will be making them an offer of a reduced financial penalty in exchange for admissions to participation in bid rigging along with certain ancillary promises. The reductions in penalty available to these companies will not be as large as those available to the companies that have applied for leniency, but will still be significant.

The OFT will publish further information as the investigation continues.

NOTES

1. Under the Competition Act 1998 and Article 81 of the EC Treaty, cartels are prohibited. Any business found to be a member of a cartel could be fined up to 10 per cent of its worldwide turnover.

2. In March 2004, the OFT found that nine roofing contractors in the West Midlands had agreed to fix the prices of repair, maintenance and improvement through collusive tendering, and fined nearly £300,000 in total. See press release 46/04. The OFT made four further findings of bid rigging in the roofing industry, from 2004 through to February 2006. See press releases 48/05, 126/05, and 34/06. To date the OFT has imposed aggregated financial penalties of just over £4 million for bid rigging in the roofing industry.

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