| OFT to pay cartel whistleblowers |
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| Friday, 29 February 2008 | |
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The OFT has announced a policy under which it will pay financial incentives of up to £100,000 in return for information which helps it to identify and take action against illegal cartels.
The news comes hot on the heals of revealations that HM Revenue and Customs paid an informant £100,000 for stolen data on British citizens with secret accounts at Liechtenstein's LGT Bank. HMRC's move, which formed part of an international operation against tax evasion, was widely criticised as both morally and legally questionable. The tax service, however, defended its decision by saying tax evasion starved vital services of the cash they deserved. Set formula The new OFT policy will run for an initial period of 18 months, after which a decision will be made whether this should be a permanent arrangement. Rewards will be paid only where information is accurate, verifiable and proves to be useful in the OFT's anti-cartel enforcement work, and will be calculated according to a set formula and not subject to negotiation. Cartels are a particularly damaging form of anti-competitive behaviour and taking action against them is one of the OFT's priorities. Cartels are prohibited under the Competition Act, and any business found to be a member of a cartel could be fined up to ten per cent of its turnover. In addition, the Enterprise Act makes it a criminal offence for individuals to dishonestly take part in cartels, and anyone convicted of the offence could receive a maximum of five years imprisonment and/or an unlimited fine. Not the preserve of big business Simon Williams, OFT Senior Director of Cartels and Criminal Enforcement said that cartels were very damaging both to businesses and consumers and that they were usually conducted in secret, making them hard to detect. He explained that cartels are not the preserve of big business - for example, if a local authority needs to find a contractor to refurbish its schools, it is unacceptable for local contractors to seek to rig the tender process by colluding on price. “That's bad for taxpayers, consumers and other businesses. We believe that it is in the public interest to offer financial incentives in the hope that it will encourage more people who have good information about the existence of hard core cartel activity to come forward, and in exceptional circumstances these incentives may be as high as £100,000,” Williams concluded. Ros Kellaway, head of the EU and competition group at international law firm Eversheds, said the move was clearly designed to encourage employees to shop their employers. "It puts a high premium on a whistle blowing policy which requires employees to speak to the company first and also a big incentive on companies to identify what’s wrong and apply for leniency first. Companies could be racing up the steps of the OFT to be first in, not just against their competitors but against their own employees," Kellaway added. Anyone who has information about cartels is asked to call the cartels hotline on 0800 085 1664 or e-mail This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Related article
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