UK Regulator Fines Recruitment Firms For Price Fixing
September 30 2009 - 2:04AM
Dow Jones News
U.K. competition watchdog the Office of Fair Trading Wednesday
fined six recruitment agencies a total of GBP39.27 million for
price-fixing and the collective boycott of another company in
supplying job candidates to the construction industry.
Hays Specialist Recruitment, a unit of Hays PLC (HAS.LN), took
the bulk of the fine and will pay GBP30.4 million.
The decision comes just a week after the OFT fined 103
construction firms a total of GBP129.5 million for colluding with
rivals on building contracts. That was one of the largest price
fixing probes ever undertaken by the regulator.
The OFT said that it had found A Warwick Associates, Beresford
Blake Thomas, CDI AndersElite, Eden Brown, Fusion People, Hays
Specialist Recruitment, Henry Recruitment and Hill McGlynn &
Associates had all broken competition rules when supplying
candidates to the construction industry. CDI AndersElite is a unit
of CDI Corp. (CDI) of the U.S.
It said Beresford Blake Thomas and Hill McGlynn &
Associates, both units of Randstad Holding NV (RAND.AE), had been
granted immunity from fines because they first provided the OFT
with evidence of the cartel activity.
All the companies applied for, and were granted, leniency, apart
from A Warwick Associates which is in liquidation. The leniency
meant that the total fine was reduced from GBP173 million.
The company boycotted was Parc UK, which entered the market in
2003 with a new business model to act as an intermediary between
construction companies and the recruiters. That put pressure on the
recruitment firms' margins, the OFT said, and prompted the
companies to set up a forum that boycotted Parc and cooperated to
fix the fees they would charge intermediaries and certain
construction firms. The OFT said the so-called "Construction
Recruitment Forum" met five times between 2004 and 2006.
-By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284;
steve.mcgrath@dowjones.com