Recruitment firms fined £39m for price-fixing

Six recruitment firms who formed a cartel to fix prices and freeze out competition have been hit with fines totalling £39.3m by the Office of Fair Trading.

The companies blocked a new competitor from supplying labour to building firms and also set fee rates to charge certain builders, the OFT found.

They agreed to boycott a new company, Parc, which entered the market in 2003 as an "intermediary" supplying workers to construction firms from several recruitment firms.

This hit the recruiters' margins and they formed a cartel to tackle Parc - known as the Construction Recruitment Forum - which met five times between 2004 and 2006.

The firms punished were Hays Specialist Recruitment, A Warwick Associates, CDI AndersElite, Eden Brown, Fusion People and Henry Recruitment.

Hays suffered the biggest fine - £30.4m - but two whistleblowers who approached the watchdog, Hill McGlynn and Beresford Blake Thomas, were spared any penalty.

The OFT's action comes a week after it imposed fines totalling £129.5m on 103 construction firms for bid-rigging activities.