£7m Fines For Construction Fit-Out Cartel Companies

FIVE COMPANIES – Fourfront, Loop, Coriolis, ThirdWay and Oakley – have agreed to pay fines totalling over £7 million after admitting being involved in cartel behaviour.
Following a Competition and Markets Authority (CMA) investigation, each company has admitted to breaking competition law at least once during the period of 2006-2017, in some cases on multiple occasions.

The firms, based in London and the Home Counties, provide fit-out, design and refurbishment of commercial and non-residential premises.

The businesses admitted to cover bidding in competitive tenders, agreeing together on the prices they would bid for contracts. Typically, cover bidding involves companies agreeing with each other to place bids that are deliberately intended to lose the contract, allowing one company to gain the work. This type of illegal behaviour can lead to customers paying higher prices or receiving poorer quality services.

These cover bids affected 14 contracts with a variety of customers, ranging from a City law firm to a further education college.

“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.”

After admitting their wrongdoing, the five companies have agreed to pay more than £7 million in fines that reflect the companies’ size, financial position and their role in the cartel:

  • Fourfront has agreed to pay £4,143,304
  • Loop has agreed to pay £1,090,816
  • Coriolis has agreed to pay £7,735
  • ThirdWay has agreed to pay £1,780,703
  • Oakley has agreed to pay £58,558
Andrea Coscelli, Chief Executive, Competition and Markets Authority

Andrea Coscelli, the CMA’s Chief Executive, 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 £7 million in fines agreed today, we will not turn a blind eye to illegal behaviour and we will take action where we find laws have been broken. This can include seeking disqualification of company directors.”

Immunity from Penalties
Any business found to have infringed the Competition Act 1998 can be fined up to 10% of its annual worldwide group turnover, and directors of the companies concerned can be banned from holding directorships for up to 15 years.

The CMA runs a Leniency Programme to encourage businesses and individuals to come forward with information about their involvement in a cartel. Businesses which come forward and co-operate with the CMA may be granted immunity from penalties or a significant reduction. In this case, JLL brought information about the conduct to the CMA’s attention and, in accordance with the CMA’s Leniency Programme, will therefore not receive a fine. Under the Leniency Programme, Loop will receive a 25% discount to its fine for coming forward with information about its participation in the cartel behaviour, and co-operating with the CMA.

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