The OFT has fined six recruitment agencies a total of £39.27 million for their involvement in price fixing and the collective boycott of another company. Those agencies fined include, A Warwick Associates Ltd, CDI AndersElite Ltd, Eden Brown Ltd, Fusion People Ltd, Hays Specialist Recruitment Ltd and Henry Recruitment Ltd. Two other recruitment agencies, namely Beresford Blake Thomas Ltd and Hill McGlynn & Associates Ltd, were granted immunity from fines for originally exposing the cartel.
The agencies were found to have engaged in anticompetitive practices, in breach of the Competition Act 1998, following the entry of Parc UK Ltd into the market for the supply of candidates to the construction industry. Parc implemented an innovative strategy, liaising between recruitment agencies and the construction companies. This put pressure on its competitors to improve their offering but instead, the eight companies investigated chose to boycott Parc, agreeing between themselves not to enter into contracts with it. The agencies also agreed to fix the fee rates they would charge to construction companies and other intermediary companies.
The agencies’ actions constituted a serious breach of competition law, distorting competition and raising prices. The OFT felt that the severity of the infringement, therefore, justified hefty fines.