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OFT hits big players on recruitment price fixing

NEWS - Competition Act probe targets anti-competitive behaviour by construction recruitment specialists

CONSTRUCTION recruitment companies being probed by the Office of Fair Trading are being accused of dividing up key public sector contracts and fixing fees.

The OFT is investigating a string of firms as part of a Competition Act probe into anti-competitive behaviour in the construction recruitment market.

Recruitment specialists Hays, Eden Brown and AndersElite have all admitted they have come under scrutiny.

A recruitment industry source told Construction News: 'I hear the big firms have been accused of price-fixing by divvying up key contracts between them. My guess is they're doing it in the public sector. That's where the money is.'

Such practices are particularly unusual in the recruitment industry where firms compete aggressively for key contracts.

CDI Corp, AndersElite's US owner, confirmed the OFT investigated the firm in June over claims of encouraging competitors to agree to minimum fees and of declining to work with an intermediary recruitment company.

CDI said: 'It is likely the OFT will ultimately impose a fine. However, it is too early in the process to determine with any reliability the amount or materiality of that fine.'

Hays confirmed it was visited in June by OFT officials as part of an investigation into possible breaches of competition law.

A Hays statement said: 'The OFT investigation relates to a small part of Hays' construction and property business.'

Hays banked profits of £192 million last year on a tu rnover of £1.68 billion.

Eden Brown divisional director Andrew Thorpe said: 'Eden Brown is complying fully with the OFT investigation on allegations of anti-competitive behaviour regarding recruitment services to the construction industry.'

An OFT statement said: 'No assumption should be made at this stage that there has been an infringement of competition law.

'The OFT will not be in a position to decide if the law has been breached until it has completed its investigations and assessed the available evidence.'

Any business found to be a member of a cartel can be fined up to 10 per cent of its worldwide turnover.