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Thursday, 2 April

JLL Off The Hook But Five Fit-outs Fined For Financial Fixing

JLL has avoided a Competition and Markets Authority financial sanction for disclosing information that saw five fit-out companies fined a total of £7 million between them for 'cover bidding'

Five office fit-out firms are to pay £7 million in fines for breaking competition law but a sixth, JLL, has gotten away scot-free after blowing the whistle on its accomplices.

JLL brought information about the conduct to the Competition and Markets Authority's attention and thus, under the CMA's Leniency Programme, will not be fined as long as the company continues to co-operate and complies with the other conditions of the leniency policy.

The five companies are Fourfront, Loop, Coriolis, ThirdWay and Oakley. Each of the five admitted being involved in cartel behaviour.

Following a CMA investigation, each company 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 services such as fit-out, design and refurbishment of commercial premises - especially offices.

 

Cover bidding

Each company has admitted to participating in 'cover bidding' in competitive tenders, colluding 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, thereby reducing the intensity of competition. This type of illegal behaviour can lead to customers paying an artificially inflated price 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.

 

Fines

The 5 have agreed to pay the following fines that reflect a number of factors including the companies’ size and financial position and their role in the cartel behaviour:

  • Fourfront - £4,143,304.
  • Loop - £1,090,816.
  • Coriolis - £7,735.
  • ThirdWay - £1,780,703.
  • Oakley - £58,558

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. 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 (on March 1) we will not turn a blind eye to illegal behaviour and we will impose penalties where we find laws have been broken. This can include seeking disqualification of company directors."

 

Competition Act

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.

 

JLL off the hook

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.

Picture: JLL has avoided a Competition and Markets Authority financial sanction for disclosing information that saw five fit-out companies fined a total of £7 million between them for 'cover bidding'.

Article written by Brian Shillibeer

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