Intellect defends large suppliers after "cartel" claim

Intellect, the trade association that represents IT suppliers, has defended large suppliers after MPs suggested that they may operate a cartel and engage in anti-competitive practices.A report published yesterday by the Public Administration...

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Intellect, the trade association that represents IT suppliers, has defended large suppliers after MPs suggested that they may operate a cartel and engage in anti-competitive practices.

A report published yesterday by the Public Administration Select Committee was entitled "Recipe for Rip-offs - time for a new approach". SMEs told the the committee that large suppliers sometimes engaged in disreputable practices. This was one the SME claims mentioned in the committee's report:


"We heard of cases where systems integrators [large IT suppliers] had involved SMEs in the bidding process so they could demonstrate innovation, only for the SME to be dropped after award of contract."

The committee said that the few large suppliers that dominate government IT may comprise an "oligopoly". Said the committee: "Whether or not this constitutes a cartel in legal terms, it has led to the perverse situation in which the governments have wasted an obscene amount of public money."

The committee recommended that the Government "urgently commission an independent, external investigation to determine whether there is substance to these serious allegations of anti-competitive behaviour and collusion. The Government should also provide a trusted and independent escalation route to enable SMEs confidentially to raise allegations of malpractice."

Responding to the report Intellect pours scorn on what it says is an implication in the committee's report that leaders of public sector businesses in our industry have been involved in criminal activity. 

"As the trade body for the ICT sector, we want to make it clear that this is not the case and cartels do not exist in our industry. On the contrary, this is a highly competitive market. Intellect would cooperate with any investigation into such allegations, but we believe it would be a waste of public money."

An Intellect blog says that some of the comments in the committee's report are "heavy-handed".  It quotes Alistair Hardie, who is the SME Champion on Intellect’s Board, and MD of an SME, who says: "On behalf of our SME members I don’t believe SME’s are disadvantaged by large ICT companies in any unfair way at all."

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