The recent dawn raids by the OFT on 22 East Midlands construction
companies are just the latest indicator that the Office of Fair Trading
is ardently sticking to its pledge to target construction and housing
markets in its competition investigations.
The OFT stated in 2004 that these markets were the subject of
numerous investigations and we saw successful probes into price-fixing
by roofing contractors, the cement sector, and double-glazing
companies, and the recent raids suggest that 2005 will continue to
subject such contractors to close scrutiny.
Given the number of investigations recently by the OFT, directors in
the construction sector, as well as directors of any company tendering
for government contracts, should be particularly aware of the relevant
legislation and of the practices going on within their organisations.
The OFT has in its arsenal the power to grant leniency to companies
or individuals who supply them with information on anticompetitive
behaviour. Thus, a company which 'breaks rank' and informs the OFT of
any such behaviour in which they are involved can avoid the 10%
turnover fine imposed under the Competition Act 1998. Perhaps more
worryingly for the directors of companies is the possibility of
incurring unlimited fines or even imprisonment for violations of the
criminal cartel offence under the Enterprise Act 2002.