(Reuters) – Australia’s competition regulator said on Thursday it had started civil proceedings against units of Downer EDI and Ventia Services for alleged price fixing for services at the Department of Defence bases.

The Australian Competition & Consumer Commission (ACCC) alleged that between April 2019 and August 2022, Ventia Australia and Spotless Facility Services made or attempted to make arrangements to control the prices for estate maintenance and operation services supplied to the defence department.

Price fixing is a type of cartel conduct that involves competitors agreeing on pricing instead of competing against each other, according to the ACCC.

“The allegations in this case relate to alleged conduct by two large, sophisticated companies providing services which are critical to the operation of Australian Defence facilities under longstanding, publicly funded Defence procurement contracts,” the ACCC Chair Gina Cass-Gottlieb said.

“We allege this conduct caused direct harm to the Commonwealth and ultimately Australian taxpayers,” she added.

Ventia and Spotless provide services under separate billion-dollar contracts to over 200 major Australian Defence Force (ADF) bases. Their current contracts are due to expire around mid-2025.

The ACCC is seeking declarations and civil penalties related to the conduct.

In a separate statement, Downer said it would defend the proceedings.

“Downer is of the view that neither Spotless nor the two Spotless employees referred to by the ACCC engaged in unlawful conduct,” it added.

Meanwhile, Ventia said it was reviewing the details of the allegations.

(Reporting by Himanshi Akhand in Bengaluru; Editing by Alan Barona)