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These firms will be fined a total of $262,759.66 by the competition watchdog following a year-long probe.
What started it all: An e-mail accidentally received by the Raffles Hotel in September 2006 from Aardwolf Pestkare, which suggested that it was in cahoots with Rentokil and PestBusters to agree amongst themselves who was to snag Raffles' contract to get rid of termites.
The others in the bid-rigging collusion scheme, which kicked in whenever a pest extermination contract came on the market, are Alliance Pest Management, Elite Pest Management and Killem Pest.
The Competition Commission of Singapore (CCS), in its first infringement decision, is fining them between $4,300 and $92,600 each. It has also turned down appeals from the six for smaller fines.
The penalties make up less than 3 per cent of the companies' combined turnover of about $33 million.
Commission chief Teo Eng Cheong said: 'We wanted the amount to be deterrent, but not unreasonable.'
The size of the fine was pegged to each company's turnover and the extent of its involvement, he explained.
Under the Competition Act, firms can be fined up to 10 per cent of their annual turnover, up to a maximum of three years.
The CCS opened its probe a month after Raffles filed a complaint regarding the contract, which involved using an anti-termite chemical called Agenda.
Surprise raids, interviews and seized e-mails from the six firms confirmed they were rigging bids, and that senior management was involved.
One e-mail from Aardwolf Pestkare to PestBusters, for example, had a line saying 'make sure you get this project and then you can buy me two beers in the morning'.
Mr Teo said of the cartel: 'It denied customers a fair bid. That cannot be tolerated.'
Industry insiders welcomed the decision, but some thought the fines were too small.
Mr David Santhanansamy of pest-buster Gecko International said: 'It's a good start by the commission, but the fines seem like a slap on the wrist.'
He added that big companies recouped financial losses very quickly, and suggested that the commission instead temporarily suspend the errant firms from bidding for government contracts - usually the larger ones.
It is not known whether the firms' customers - among them Alexandra Hospital and Temasek Junior College - will take legal action against the six.
Three of the six companies that agreed to speak to The Straits Times said, however, that while they accepted the penalties, they thought the fines 'harsh'. They also pointed out that they had stuck to the recommended price of $70 per m for treatment using the chemical.
PestBusters' managing director Thomas Fernandez said: 'My conscience is clear.'
But competition partner Ameera Ashraf of WongPartnership said bid-rigging denied customers value-added services that healthy competition would otherwise encourage. 'It's not just about the price,' she said.
The CCS will be holding a seminar to help companies understand and spot anti-competitive practices. For more information, visit www.ccs.gov.sg
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