REUTERS | David Mdzinarishvili

Bid rigging investigation moves “down under”

In 2009, the construction press was full of stories about cover pricing and bid-rigging in the construction industry. This was because of the Office of Fair Trading’s (OFT) investigation (which had started in 2004), and which resulted in fines of £129.5 million being imposed on 103 construction companies in September 2009.

The story is set to rumble on in 2010, since 25 companies have lodged notices of appeal with the Competition Appeal Tribunal (CAT). The CAT has not announced whether these appeals will be handled individually or collectively and, so far, no date has been announced for the case management conferences.

We are not alone. Cover pricing allegations are making headlines elsewhere in the world. The Australian Competition and Consumer Commission (ACCC) has announced that it is investigating cover pricing in the Australian (Queensland) construction industry.

It seems the potential fines “down under” are also significant:

  • A company faces a penalty that is the greater of:
    • AUS$10 million (about GBP £5.7 million); or
    • three times the gain from the contravention; or
    • 10% of the turnover of the corporation and all of its interconnected bodies corporate.
  • An individual faces a penalty of:
    • up to AUS$500,000 (about £300,000) if civil action is taken; or
    • a maximum term of imprisonment of 10 years and/or a maximum fine of AUS$220,000 (about £125,000) if criminal liability is established.

We wonder which jurisdiction will be next to come under the spotlight.

One thought on “Bid rigging investigation moves “down under”

  1. On 26 January 2010, the CAT published a ruling and order setting out its decision as to the future course of proceedings in the 25 appeals against the OFT’s construction bid-rigging decision. Read more.

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