Sellers of communal technology sanctioned for cartel agreements in public procurements

In recent weeks the Office for the Protection of Competition (the Office) has issued three decisions imposing fines of total amount CZK 5,070,000 (approximately EUR 184,363) for cartel agreements on market sharing and collusion in submitting bids within public procurements for supplies of communal technology.

The breach of the Act on the Protection of Competition by eight companies has been proved by the Office.  

By the first decision the Office fined undertakings GARNEA a.s. and GARDEN Studio, s.r.o. for coordination of bids within the awarding procedure “Purchase of garden equipment” of National Heritage Institute. The collusion had an actual impact on the outcome of mentioned awarding procedure and restricted the competition in the market of communal technology. For the competition infringement the fine of CZK 1,518,000 has been imposed on the company GARNEA and the fine of CZ 74 000 has been imposed on the company GARDEN Studio. Mentioned decision has not yet come into force and it may be appealed.

The second decision covered anticompetitive conduct of companies KIS plus, a.s. and GARDEN Studio during the awarding procedure “Supply of communal vehicle” conducted by the contracting authority Municipal Transport Office Plzen, a.s. from the year 2010. For influencing the outcome of the awarding procedure and restriction of competition in the market of communal technology a fine of CZK 1,501,000 has been imposed on the company KIS and a fine of CZK 74,000 on the company GARDEN Studio. The decision has already come into force.

By the third decision, sanctions of CZK 1,903,000 have been imposed on companies GARDEN Studio, s.r.o. (CZK 388,000), CHLEBIŠ s.r.o. (CZK 185,000), ŠKÝZ s.r.o. (CZK 62,000) AGROCAR s.r.o. (CZK 536,000) and on economically active natural persons M. Š. (CZK 614,000) and T. M. (CZK 118,000). The Office proved that mentioned undertakings shared the customers and supplies of communal technology according to territorial principle in the period from 22/3/2010 to 14/8/2012. Undertakings applied for settlement procedure and admitted the legal qualification of their behavior and therefore the fines were lowered by 20 %. The decision has not been appealed and has already come into force.   

In all three cases the anticompetitive behavior has been proved by collected communication of parties of the cartel agreements and by comparing the bids. The largest of mentioned administrative proceedings conducted against the company KIS plus, a.s. had to be divided into two proceedings due to procedural reasons as the undertakings was not willing to apply for the settlement procedure. 

Cartel agreements among bidders so called bid rigging represent the most serious types of competition law infringements as they totally restrict the competition within the public procurement and restrict the efficient use of public resources. It is estimated that as a consequence of the cartel the price of procurements rises by up to 20 %.

 

International and External Relations

14/093/HS037 – S123/2012, S230/2012, S835/2014