Give yourself up
The Office of Fair Trading (OFT) has been targeting the construction sector. A recent decision by the Competition Appeal Tribunal (CAT) raises a number of important issues.
First, there would be collusion where:
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a tenderer approaches a competing tenderer for a quote for a sub-contract in relation to the tender; |
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both companies know that the other is tendering; |
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the quote accounts for a large proportion of the main contract; and |
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the tenderer that obtains the quote allows it to influence its own quote for the main contract. |
In short, almost any contact between competing tenderers is highly risky.
Second, the level of fines is increasing dramatically. The CAT upheld a fine of £526,500 against a roofing contractor. What is surprising is that there was only one complaint against the contractor and this was in relation to tendering (see above) of a single roofing contract worth approximately £300,000.
Third, the CAT upheld a principle that in cartel cases, in order to provide a sufficient deterrent, cartelists whose turnover on the relevant market is only a small proportion of their total turnover should have a penalty imposed as if 15% of their total turnover had been achieved on the relevant market.
What is clear? Both the OFT and the CAT are taking an increasingly tough line on cartels. Read the full article by Taylor Wessing Corporate partner, Martin Baker (published in Building magazine's 29 June 2007 edition).