OFT calls for more contract tip-offs

6 January 2005
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06 January 2005 | Cara Whitehouse

The government's competition watchdog wants more whistleblowers to come forward in its battle against illegal supply chain arrangements.

A spokesman for the Office of Fair Trading (OFT) said its ability to shield whistleblowers from penalties was delivering results.

He told SM: "We will continue to focus on our leniency programme, where whistleblowers can get a 100 per cent cut in their fine. It is a very effective way to get information about price-fixing cartels and will be vital in five new areas we are prioritising over the next three years."

He said the OFT welcomed a judgment last month by the Competition Appeal Tribunal, upholding its decision on price-fixing of games and toys that kept prices artificially high.

The tribunal upheld the OFT's decision that Argos and Littlewoods had illegally fixed prices of Hasbro games and toys between 1999 and May 2001.

The board game Monopoly was priced at £17.99 in the spring and summer catalogues of both companies. Both now price the game differently and under £14.

The retailers were fined a record £22.7 million in total. Argos suffered a £17.3 million penalty and Littlewoods paid £5.4 million, reflecting their respective turnovers.

The OFT had found that while Hasbro had colluded in the price-fixing, it provided crucial evidence that initiated the investigation and co-operated fully, so its fine was waived. It had faced a £15.6 million penalty.

This coming year will see the OFT focus on five areas, including public procurement, according to its draft annual plan.

"Interaction between government and markets" will be analysed, it says.

This includes public procurement, regulation and the competition between public bodies and the private sector.

Factors such as how much the government spends and its growing use of private companies have contributed to its inclusion on the priority list.

Other areas in line for scrutiny include credit markets, healthcare markets, and construction and housing markets, including related services such as estate agencies.

It is the first time the OFT has specified areas for priority attention, according to John Vickers, OFT chairman.

The draft plan is open for consultation until the end of this month and a final plan will be published by 31 March.

Competition in specific areas of public-sector procurement, such as weapons and ammunition manufacture, could also come under further scrutiny this year following OFT research published at the end of September.

Very long-term contracts or overly restricting the numbers of participants invited to tender have been identified as ways in which public-sector buying power could limit competition.


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