121/08    21 October 2008

The OFT has today issued a Statement of Objections alleging that eight recruitment agencies have breached the Competition Act 1998.
 
The Statement of Objections sets out the OFT's proposed findings against A Warwick Associates, Beresford Blake Thomas, CDI AndersElite, Eden Brown, Fusion People, Hays Specialist Recruitment, Henry Recruitment and Hill McGlynn Associates.

The OFT alleges that these recruitment agencies engaged in the following conduct, in breach of the Chapter I prohibition of the Competition Act 1998 [see notes]:

• Collective boycott – an agreement to withdraw from and/or refrain from entering into contracts with a particular intermediary for the supply of candidates to construction companies in the UK, which had as its object the prevention, restriction or distortion of competition in the market for the supply, by recruitment agencies, of candidates with professional, managerial, trade and labour skills required by the construction industry in the UK.
• Price fixing - an agreement and/or concerted practice to fix target fee rates for the supply of candidates to intermediaries and certain construction companies in the UK, which had as its object the prevention, restriction or distortion of competition in the market for the supply, by recruitment agencies, of candidates with professional, managerial, trade and labour skills required by the construction industry in the UK.

The OFT alleges that this behaviour formed one single overall infringement, which took place from late 2004 to between the end of 2005 and early 2006 - the exact duration of a given recruitment agency's involvement in the alleged infringement varied.

John Fingleton, OFT Chief Executive, said:

'For a market to work well, companies should compete to supply services and set prices independently. If we find evidence of anti-competitive activity we will use the appropriate powers to punish the companies involved. If proven, the alleged practices in this case would amount to a serious breach of the law.'

At this stage it should not be assumed that the parties involved have broken the law. The OFT will decide if the law has been breached after it has reviewed any responses to the Statement of Objections [see note 4].

NOTES

1. The addressees to the Statement of Objections are the following companies:

• A Warwick Associates Limited
• Beresford Blake Thomas Limited
• CDI AndersElite Limited
• Eden Brown Limited
• Fusion People Limited
• Hays Specialist Recruitment Limited
• Henry Recruitment Limited
• Hill McGlynn Associates Limited

2. In addition, the OFT may, where applicable, seek to attribute liability to other companies, such as parent companies within the same corporate group, in which case the Statement of Objections is also addressed to them.

3. The Competition Act 1998 prohibits agreements, concerted practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices that have the object or effect of preventing, restricting or distorting competition in the UK or a part of it and which may affect trade in the UK or a part of it.

4. A Statement of Objections gives notice of a proposed infringement decision under the Competition Act 1998 to the parties involved. It sets out the facts on which the OFT relies, the objections raised by the OFT, the action it proposes to take and the reasons for it. This document is not a decision document and the parties have the opportunity to make written and oral representations in response to the alleged case set out by the OFT. Such representations (if any) will be considered by the OFT before any final decision is made.

5. The Statement of Objections will not be published. In accordance with the OFT's guidance on Involving third parties in Competition Act investigations (pdf 289 kb), any person who wishes to comment on the OFT's proposed findings, and who is in a position materially to assist the OFT in testing its factual, legal or economic arguments, may request a non-confidential version of the Statement of Objections by contacting the OFT no later than 4 November 2008.