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OFT urges SMEs to come clean and fix the fixers

Launch of 'Come Clean on Cartels' month

206/05    2 November 2005

Businesses involved in price-fixing, market-sharing, bid-rigging or other cartels can wipe the slate clean and remove the risk of severe penalties, says the Office of Fair Trading.

Today is the start of 'Come Clean on Cartels' month - a campaign by the OFT to make businesses - especially small and medium sized enterprises (SMEs) - aware of the OFT's leniency programme which allows firms involved in anti-competitive practices such as price fixing and bid-rigging to blow the whistle on the cartel and receive partial or even total immunity from fines.

Businesses who want to report suspicions about a cartel, or who want advice about cartels, can call the OFT's hotline on 020 7211 8888. Formal applications for leniency should be made by calling 020 7211 8117.

New research (see note 1) reveals that 40 per cent of SMEs owners believe that smaller firms who are involved in anti-competitive practices would be more eager to come forward and report their activity to the authorities if they knew that they could avoid or reduce the fines they risk.

Philip Collins, OFT Chairman, said:

'November is 'Come Clean on Cartels' month. We want to urge businesses, especially SMEs, to make a clean break with any anti-competitive agreements they may be involved in. Such activities are illegal, and can result in a fine of up to 10 per cent of turnover of a business, or even a prison sentence in the most serious cases. We want to tell them about our leniency programme and make small and medium sized firms in particular aware that they have a chance to come forward and reduce the penalties that they could face or avoid them altogether.

'SME's form the dominant part of the economy and we want to ensure that they operate in competitive markets - it is consumers who pay the price for businesses colluding in cartels in the form of higher prices, less choice or lower levels of innovation.'

The OFT research reveals that a quarter of SMEs in the UK feel that they have been a victim of anti-competitive practices and a third are aware of such practices in their own industry.

To date, the OFT has received 88 approaches under its leniency programme. However, this does not represent the actual number of investigations. In some cases approaches are received from several companies in relation to a single investigation, and not all applications result in a Competition Act investigation.

'Come Clean on Cartels' month is part of the OFT's 'Championing Competition' campaign to promote competition to small and medium sized enterprises. For more details see OFT press releases 92/05 and 129/05.

NOTES

1. Research by NOP World, SME Omnibus amongst 500 owners and managers of SME businesses during May 2005 nationally by telephone.

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