An 18-month trial scheme of payments to informants has been launched by the Office of Fair Trading (OFT), which said that payments could in some cases reach £100,000, but only when strict conditions are met.
"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," said an OFT statement.
Incentives already exist for companies involved in anti-competitive behaviour. EU rules allow companies to avoid fines if they approach the European Commission with information about abuses they have participated in.
There is a sliding scale of discounts on fines available to companies under Commission rules which is used to reflect the level of co-operation at a corporate level.
The UK's plans will make rewards at an individual level, though, in a plan which the OFT hopes will help it to prosecute companies for cartel behaviour.
"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," said Simon Williams, OFT senior director of cartels and criminal enforcement.
Cartels are illegal under the Competition Act, which says that companies can be fined up to 10% of their turnover if caught. The operation of a cartel became a criminal offence in the UK for the first time in 2002 with the passing of the Enterprise Act.
"Cartels are very damaging both to businesses and consumers and they are usually conducted in secret, making them hard to detect," said Williams. "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."
