Kier Group Plc, Kier Regional Ltd v Office of Fair Trading: CAT 11 Mar 2011

The CAT set ot the decision of the respondent: ‘1 On 21 September 2009 the Office of Fair Trading (‘OFT’) published a decision under the Competition Act 1998 (‘the 1998 Act’) entitled ‘Bid rigging in the construction industry in England’ (‘the Decision’). The Decision is the longest decision ever adopted by the OFT, running to nearly 2,000 pages. It followed an extensive investigation which took place over some five and a half years between April 2004 and September 2009 which was by far the largest undertaken by the OFT, in terms of the number of parties involved, the number of inspections made and the number of suspected infringements.
2 In the Decision the OFT found that, in the period 2000 to 2006, 103 undertakings had each committed between one and three infringements of the prohibition contained in section 2 of the 1998 Act (‘the Chapter I Prohibition’). That prohibition applies to agreements or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom.
3 By far the majority of those infringements consisted of what can perhaps be referred to as ‘simple’ cover pricing, to distinguish them from the six infringements described at paragraph 21 below. ‘Simple’ cover pricing occurs where one of those invited to tender for a construction contract (Company A) does not wish to win the contract, but does not want to indicate its lack of interest to the client, for whose work it may wish to be invited to tender in the future. Company A therefore seeks a cover price from another company which is tendering for that contract (Company B). Company B will be seeking to win the contract and will have reached a view as to its own tender price. Indeed it may already have submitted its own tender to the client. The cover price which it provides to Company A will be at a level sufficiently high to ensure that Company A does not win. This price is submitted to the client by Company A as though it is a genuine tender. It should be noted that Company B does not reveal its own tender price to Company A – the cover price is an inflated price.
4 The OFT imposed penalties totalling approximately andpound;129.2m in respect of 199 infringements.’
[2011] CAT 3

Updated: 13 March 2021; Ref: scu.441647