Office design and fit-out cartel leads to director disqualifications
First published by Author on June 13, 2019 in the following categories: Cartels Investigations Price Fixing Price Hikes Pricing and tagged with cartels | cma | competition law | cover bidding | cover pricing | price fixing | pricing
The CMA (Competition and Markets Authority) has secured the disqualification of a number of directors in the aftermath of the fines issued in the office design and fit-out cartel investigation.
In April 2019, fines in the sum of £7m were issued to a number of companies who had been found guilty of breaking vital competition laws. For over a decade, the guilty companies had been engaging in cover bidding, where they were able to artificially inflate the prices of at least 14 contracts. This kind of behaviour can also reduce the quality of services on offer for the consumer as well.
Now, the CMA has taken further action by securing disqualifications for a number of directors who were involved in the cartel activity.
Companies involved in the office design and fit-out cartel
The companies involved in the office design and fit-out cartel, and how they were fined, is as follows:
- Fourfront: £4,143,304.00;
- Third Loop: £1,090,816.00;
- Way: £1,780,703.00;
- Oakley: £58,558.00;
- Coriolis: £7,735.00;
- JLL: £0.00 (as they were the firm that brought the cartel to the attention of the CMA).
They had engaged in behaviour to deliberately price themselves out of contracts being tendered, with the winning contractor able to charge higher prices as long as they were less than the inflated competitor ones. Consumers were robbed of the opportunity to pay lower prices through healthy competition, and their behaviour was found to have breached important competition laws.
Directors disqualified
The latest development in the office design and fit-out cartel case has lead to a number of directors being disqualified, as well as undertaking being made.
The CMA has confirmed the details as follows:
- Mr Robb Simms-Davies, working within the JLL group of companies: disqualified for five years;
- Mr Trevor Hall, working within the Fourfront group of companies: disqualified for two and a half years;
- Mr Oliver James Hammond, also working within the Fourfront group of companies: disqualified for two years.
The CMA has confirmed that the directors were all involved with, and contributed to, the illegal cartel activity. It’s understood that Mr Simms-Davies may have been able to benefit from immunity from disqualification, but this was withdrawn when he reportedly failed to attend an interview with the CMA.
Contracts they were involved with were said to be worth millions of pounds.
A positive development
The disqualifications as well as the original fines in the cartel case are positive steps in our view, and this should act as a clear deterrent for other companies who consider involving themselves in unfair behaviour.
Cartel activity only ever serves to inflate the profits of the companies at the expense of the consumer. This prevents the consumer for enjoying the benefits of healthy competition, and the CMA can come down hard on companies who involve themselves in this kind of behaviour.