The Office of Fair Trading (OFT) is offering up to £100,000 to anyone who provides it with information that helps it identify and take action against cartel activity.
The OFT said it would trial the policy for a period of 18 months. After this time, it would consider whether paying for hard evidence should become a permanent tool in its armoury of weapons aimed at combatting illegal activity.
Rewards will be paid only where the information provided is accurate, verifiable and proves to be useful in its anti-cartel enforcement work, the OFT said. The amounts will be calculated according to a set formula and are not subject to negotiation.
Simon Williams, OFT senior director of Cartels and Criminal Enforcement, said: “Cartels are very damaging both to businesses and consumers and they are usually conducted in secret making them hard to detect.
“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.”
The OFT has spent almost three years investigating collusive tendering by construction companies in England and Wales. Its investigation uncovered evidence of bid-rigging in thousands of tenders with a combined estimated value approaching £3 billion.
Mr Williams said it was in the public interest to financially reward people for information on the existence of hard core cartel activity.
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.
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.
The OFT is asking people with information to call the cartels hotline on 0800 085 1664 or e-mail firstname.lastname@example.org.