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UPDATE 2-UK consumer watchdog fines six recruitment agencies

Published 09/30/2009, 03:32 AM
Updated 09/30/2009, 03:36 AM

* OFT says six agencies agreed to boycott another company

* Hays Plc unit fined 30.4 million pounds

* Two other recruiters not fined due to cooperation

(Adds companies declining to comment)

LONDON, Sept 30 (Reuters) - Britain's consumer watchdog said on Wednesday it had fined six recruitment agencies a total of 39.27 million pounds ($62.61 million) for price fixing and the collective boycotting of a company that introduced a new business model to the industry.

The Office of Fair Trading (OFT) said the six agencies had agreed not to undertake any contracts with ParcUK, which started up in 2003 as an intermediary between recruiters and construction firms, putting pressure on the margins of recruitment firms.

"Instead of competing with Parc - and each other - on price and quality, the parties formed a cartel," the OFT said, adding that group members, who met five times between 2004 and 2006, agreed to boycott Parc and fix rates they would charge to construction companies.

Their actions violated the Competition Act of 1998, it said.

Hays Specialist Recruitment, a unit of Hays Plc was penalised 30.4 million pounds, the highest fine. CDI AndersElite, a unit of CDI Corp, was fined 7.6 million pounds. Both Hays and AndersElite declined to comment.

Private companies Eden Brown, Fusion People, A Warwick Associates Ltd, and Henry Recruitment also received penalties.

Two other recruitment agencies involved were granted immunity from fines because they exposed the cartel, the OFT said, and most of those fined were given discounts for leniency.

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"This is a serious breach of competition law and the level of fines reflects this," Heather Clayton, the OFT's Senior Director, said in a statement.

"Ultimately it is the consumer and the wider economy that loses out from such behaviour." ($1=.6272 Pound) (Reporting by Catherine Bosley; Editing by Hans Peters)

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