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Wed June 19 2019

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London fit-out contractors fined for cover pricing

1 Mar Five office fit-out contractors have agreed to pay fines totalling £7m after admitting colluding in cover pricing.

The five offenders operate across London and the Home Counties
The five offenders operate across London and the Home Counties

The five companies are Fourfront, Loop, Coriolis, ThirdWay and Oakley, which are all based in London and the Home Counties.

The companies admitted to breaking competition law at least once during the period of 2006 – 2017, in some cases on multiple occasions, following an investigation by the Competition & Markets Authority (CMA).

The whistle was blown by Jones Lang LaSalle (JLL), which acquired fit-out firms Bluu Solutions Limited and Bluuco Limited in 2015 and discovered what had been going on. JLL was let off a fine under the CMA’s leniency programme.

Each company has admitted to participating in cover pricing in competitive tenders, colluding on the prices they would bid for contracts. Typically, the practice – also known as cover bidding or complementary bidding – involves companies agreeing with each other to place bids that are deliberately intended to lose the contract, thereby reducing the intensity of competition. The result can be customers paying an artificially inflated price or receiving poorer quality services.

The fit-out cartel’s collusion cover bids affected 14 contracts with a variety of customers, ranging from a City law firm to a further education college.

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The five companies have formally admitted that their actions constituted a breach of competition law and have agreed to pay the following fines that reflect a number of factors including their respective size and financial position, and their role in the cartel behaviour: Fourfront £4,143,304;  Loop £1,090,816;  Coriolis £7,735;   ThirdWay £1,780,703; and Oakley £58,558.

Loop will receive a 25% discount to its fine for cooperating with the CMA and coming forward with information about its participation in the cartel behaviour.

CMA chief executive Andrea Coscelli said: “The CMA is concerned it is seeing a lot of evidence of anti-competitive conduct in the construction industry, and we have already taken a number of cases in this sector. Today’s fines reinforce the message that the CMA will not tolerate competition law being broken.

“As shown by the total of £7m in fines agreed today, we will not turn a blind eye to illegal behaviour and we will impose penalties where we find laws have been broken. This can include seeking disqualification of company directors.”

MPU

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