Decision on cartel of construction companies confirmed, sanctiones were lowered

2016-02-08
On 8 February 2016 the Chairman of the Office for the Protection of Competition (the Office) Mr. Petr Rafaj issued a decision on the appeal against the first instance decision in case of so called construction cartel. The merits of the first instance ruling were confirmed. However, the Chairman of the Office decreased the fines imposed on particular cartel participants.

For the competition infringement in the market of engineering constructions in the Czech Republic legally effective fines of CZK 1,659,993 (approximately EUR 59,798.5) were imposed on undertakings STRABAG (CZK 497,556,000), EUROVIA CS (CZK 492,620,000), SWIETELSKY stavební (CZK 76,209,000), M-SILNICE (CZK 46,064,000), BERGER BOHEMIA (CZK 13,518,000), Skanska (CZK 529,818,000), Lesostavby Třeboň (CZK 4,208,000).

Mentioned undertakings breached the Act on the Protection of Competition by coordinating their participation and bids within the award procedures for public procurement “R4 Mirotice – Třebkov“ (apart from undertaking Lesostavby), Písek – reconstruction of the area on Bakalářích – I. phase“ (only companies Strabag and Lesostavby) and “Recontruction of Jeronýmova Street in Třeboň“ (only companies Strabag and Lesostavby).

The Office gained information on anticompetitive conduct in the course of twelve dawn-raids that were conducted within more than two-year long investigation. Gathered evidence prove that participants to the cartel agreement agreed on and prepared so called cover bids for mentioned public procurement. Some of them were intentionally incomplete or overvalued. By this means cartel participants entirely excluded the effect of competition from the award procedures and the winner was the undertaking previously chosen by the cartel.

The Chairman of the Office decided to slightly decrease the fundamental amount for the calculation of fine as the first instance decision-making body did not include in the calculation, beside the gravity of the offense, also the aspect of individual gravity of the conduct of particular parties to the proceedings.

Collusive conduct consisting of coordination of bidders, so called bid rigging, belongs to hard core cartels with the most negative impact on competition. Prior to the submission of bids participants of the award procedure agree that they will not act independently and compete with each other and that they will submit coordinated bids that will increase the price or decrease the quality of procured goods or services. The aim is to achieve better conditions for the winner of the award procedure. Bid rigging usually includes aspects of price agreements and also market sharing agreements. Detection of bid rigging is a long term priority of the Office.  

Public Relations
16/011/HS006 – R381,382,388,389,390,393,395/2015

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