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Total fines from probe will dwarf BA’s record penalty

The Office of Fair Trading looks set to smash its record for fines on a single investigation as it considers escalating penalties for major contractors.

Last August, British Airways was hit with a £121.5 million fine after admitting collusion over the price of long-haul passenger fuel surcharges. This is the largest ever imposed by the competition watchdog.

But sources close to the construction investigation said the penalties resulting from the probe will dwarf this figure.

One law firm said: “With 112 firms involved, even if the -individual fines are modest, it is inevitable the total will be way over the BA fine.

“When you look at the turn-over of the larger firms involved, if they are fined, they could make up the bulk of that total on their own.”

An OFT spokeswoman confirmed the aggregate fines would run into millions of pounds.

She added: “It is difficult to put a finger on a total but we know it will run into millions and may well be higher than the fine for BA. I don’t think we would be surprised by that.”

The fines will be decided by the OFT’s cartels team using standard guidelines to build up a figure for each firm.

But the team also has the power to increase this figure if it thinks a standard fine does not match up to the size of the company in question.

An earlier OFT investigation into a cartel in the West Midlands in the roofing sector saw new procedures brought in that may now be used against main contractors.

Under so-called ‘minimum deterrent thresholds’, a fine against Keller subsidiary Makers was increased after the penalty calculated by the OFT was deemed unlikely to sufficiently discourage others from anti-competitive practices.

The OFT has also said it will pursue fines against firms even where they have since gone out of business.

The spokeswoman added: “There is still a possibility that we can get financial recompense from the former owners of these companies as long as the business has not yet been completely dissolved.”