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Cover pricing firms fines slashed

The first contractors to appeal against the size of their fines for cover pricing have seen their penalties heavily reduced.

Kier Group, which was hardest hit by the 2009 Office of Fair Trading (OFT) investigation into cover pricing, has seen its fine slashed by the Competition Appeal Tribunal from £17.9M to £1.7M.

Five other firms have had their fines cut. They are: John Sisk & Son Limited and Sicon Limited; Thomas Vale Holdings Limited and Thomas Vale Construction Limited; Corringway Conclusions plc; Bowmer and Kirkland Limited, B&K Property Services Limited; and Ballast Nedam N.V.

In September 2009, the OFT fined 103 construction companies a total of £130M in its inquiry into cover pricing. Cover pricing is where one or more bidders in a tender process places an artificially high price so as not to win the contract. The move can give a misleading impression to clients of the real extent of competition.

The OFT said it may appeal to the Court of Appeal.

“Today’s judgment was limited to the level of penalty for these six companies, who did not challenge our finding that they engaged in illegal cover pricing, in breach of competition law.

“The OFT will consider this judgment in detail, alongside those in the 19 other construction cases yet to be determined, and will consider whether it should appeal to the Court of Appeal,” it said.

Kier said it fully endorses competition law and, in 2007, began the implementation of a comprehensive compliance programme which has been firmly embedded throughout the business.

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