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Six recruitment agencies supplying the construction industry with labourers and managers were today fined a total of almost £40 million for price fixing and forming a cartel in order to boycott a new rival.
Stock market-listed Hays received the largest fine of £30 million after two of its offshoots conspired in the cartel.
The Office of Fair Trading said that builders including Vinci, Taylor Woodrow and Atkins had been victims of the recruiters' cartel.
Temporary and part-time workers make up the bulk of the construction industry's workforce giving the recruitment sector revenues of £4.6 billion a year.
The OFT found that after a new company Parc entered the market in 2003 “with an innovative business model to act as a recruitment consultant between construction companies and different recruitment agencies” the existing agencies ganged up against it to protect their margins.
The eight agencies formed what they called the Construction Recruitment Forum which looked like a trade body but was actually a cartel. This met five times between 2004 and 2006 and not only agreed to boycott Parc but also to fix fees.
CDI AndersElite was fined £7.6 million and Eden Brown £1 million.
OFT director Heather Clayton said the case was a serious breach of competition law.
