OFT Investigates Recruitment Price Fixing

This week The Office of Fair Trading (OFT) has accused eight recruitment firms of price fixing over the supply of candidates to construction firms.The OFT alleges that these recruitment agencies engaged in the following conduct, in breach of the Chapter I prohibition of the Competition Act 1998:

• 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 the breaches took place between late 2004 and early 2006,

John Fingleton, chief executive of the OFT, 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.”

The companies accused are:

1. A Warwick Associates
2. Beresford Blake Thomas
3. CDI AndersElite
4. Eden Brown
5. Fusion People
6. Hays Specialist Recruitment
7. Henry Recruitment
8. Hill McGlynn Associates.