Cartel convicted following CCPC investigation
May 31, 2017
- Central Criminal Court imposes three-month suspended sentence and a fine of €7,500 on Brendan Smith.
- Brendan Smith disqualified from acting as a company director for a period of 5 years.
- Aston Carpets & Flooring fined €10,000.
- CCPC issues warning to businesses to comply with competition law.
The Central Criminal Court today convicted and sentenced both Brendan Smith and Aston Carpets & Flooring (Aston Carpets) for engaging in bid-rigging in the procurement of flooring contracts for major international companies between 2012 and 2013.
Following an investigation by the Competition and Consumer Protection Commission (CCPC), both parties pleaded guilty to engaging in and implementing an anti-competitive agreement contrary to the Competition Act 2002. Separately, Mr Smith was also convicted of impeding a criminal prosecution. Judge McCarthy imposed a three-month suspended sentence on Mr Smith plus a fine of €7,500. Mr Smith has also been disqualified from acting as a company director for a period of 5 years in accordance with section 839 of the Companies Act 2014. The judge imposed a fine of €10,000 on Aston Carpets.
The Central Criminal Court heard details of the investigation, opened by the CCPC, following information received from a complainant and an application made under the CCPC’s Cartel Immunity Programme. The Cartel Immunity Programme is operated by the CCPC in conjunction with the Director of Public Prosecutions. It provides immunity to a member of a cartel if they are the first member to come forward, reveal their involvement in illegal cartel activity and fully co-operate with the CCPC’s investigation.
Responding to today’s sentencing, Isolde Goggin, Chairperson of the Competition and Consumer Protection Commission said, “All businesses, regardless of size or sector, must comply with their obligations under competition law. This also serves as a reminder to those involved in procurement to be vigilant.”
“Cartels are serious criminal offences. They can pose significant damage to the economy. Bid rigging, in particular, distorts the competitive tender process, potentially excluding legitimate competitors and potentially resulting in artificially high price bids. The victims of bid-rigging are customers – in the private sector, hard-working, legitimate businesses, and in public procurement, where the customer is the State, it is the taxpayer who suffers as the winning bid tends to be higher than it should have been.
“It is crucial for the proper functioning of our economy that cartels are detected and tackled with the full force of the law. When we look at the companies who were on the receiving end of this cartel’s activities, it is clear that not only do the individual companies suffer, so does Ireland’s reputation as a good place to do business. At a time when Ireland is preparing for the economic impact of Brexit, maintaining our competitiveness and attractiveness as a good place to do business is essential so that we can maximise foreign investment.”
“Cartels are, and will continue to be, one of the CCPC’s main enforcement priorities. Anyone convicted may be liable to either a term of imprisonment or a substantial fine or both. We strongly urge any individual who believes they have evidence of any anti-competitive conduct to contact us under our Cartel Immunity Programme. Details of the programme can be found on our website www.ccpc.ie.”
During the course of the investigation the CCPC found that an agreement had been made between Aston Carpets and a competitor to set prices for certain tenders between 2011 and 2013. The intention of this agreement was to fix the price, indirectly, for the supply and fitting of floor finishes and also to share the market by over-bidding on alternating tenders. The CCPC found that there had been collusion in respect of 16 contracts, the values of which ranged from €17,000 to €477,000. During the course of the investigation the CCPC undertook searches of a number of premises to seize evidence (including emails, quotations and telephone records) and in April 2014, Mr Smith, a Director of Aston Carpets was arrested by An Garda Síochána and detained under the provisions of section 4 of the Criminal Justice Act 1984. Charges were subsequently brought against both Mr Smith and Aston Carpets.
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