CAT 8
1 Apr 2011
Judgment of the Tribunal on three appeals brought by six appellants (“the Appellants”) against certain aspects of the decision of the Office of Fair Trading (“the OFT”) entitled “Construction Recruitment Forum” dated 29 September 2009 (“the Decision”). In the Decision the OFT imposed a total fine of £39.27 million on six recruitment agencies for transgressing the Chapter I prohibition of the Competition Act 1998 by price-fixing and organising a collective boycott of another company.
Each of the Appellants challenged three common elements of the OFT’s penalty calculation. The Tribunal held, first of all, that the measure of turnover used as the starting point for determining the appropriate level of penalty in this case was “net fees” rather than “gross turnover” as applied by the OFT. The Tribunal, secondly, dismissed the challenge to the figure of 9 per cent of relevant turnover, adopted by the OFT as its starting point, to reflect the seriousness of the infringement. Thirdly, the Tribunal held that the application by the OFT of a so-called “Minimum Deterrence Threshold” to adjust the penalties imposed on infringing undertakings in order to deter undertakings from engaging in anti-competitive behaviour was an inappropriately mechanistic and narrow approach. The assessment which, in the Tribunal’s judgment, was required should take into account the various circumstances of the individual undertaking and should ensure that a penalty is determined that is proportionate.
Applying these conclusions to the three appeals, and having determined grounds of appeal which related to the individual circumstances of each Appellant, the Tribunal varied the penalties imposed on the Appellants as follows:
- Eden Brown Limited: the original total penalty of £1,072,069 was varied to £477,750.
- CDI AndersElite Limited and CDI Corp: the original total penalty of £7,602,789 was varied to £1,543,500.
- Hays plc, Hays Specialist Recruitment Limited, and Hays Specialist Recruitment (Holdings) Limited: the original total penalty of £30,359,129 was varied to £5,880,000.
This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.