NMa Suspects Heijmans and Solétanche of Cartel Agreements

The Netherlands Competition Authority (NMa) has drawn up a report on Heijmans Beton- en Waterbouw B.V. and Solétanche Bachy France S.A. due to agreements that restrain competition in the area of the application of certain foundation techniques, including diaphragm walls, and carrying out certain categories of concrete civil engineering activities in the Netherlands. Heijmans and Solétanche are (potential) competitors with regard to these activities.

On the basis of an investigation, NMa has established that Heijmans Beton- en Waterbouw B.V. and Solétanche Bachy France S.A. entered into a framework agreement at the end of 2000 with regard to special foundation techniques and civil engineering activities. In accordance with this framework agreement, the parties undertook to inform each other of projects for which tenders are issued and in which certain foundation techniques are applied, such as diaphragm walls. After this obligatory notification, Heijmans and Solétanche observed an exclusive negotiation period in which they decided whether the parties would subscribe jointly to the project. In this period, the parties exchanged information, as a result of which they were informed of the interest in the project and the intended market behaviour of the other party. In addition, if the parties decided after this not to subscribe jointly to the project, sensitive market information had still been exchanged. The parties also exchanged strategic information on market developments. In addition, the framework agreement prohibited the parties from contacting the customer or other possible partners in the project during the negotiation period. Finally, the framework agreement contained an agreement to divide the market.

In NMa's opinion, the framework agreement frustrates competition between Heijmans, SBF and their competitors. After all, the parties are not able to compete with each other during the agreed negotiation period, nor can they negotiate with other possible partners. Agreements in which (potential) competitors agree beforehand to maintain permanent contact and to inform each other in a structural manner of market behaviour by nature restrain competition and are therefore prohibited. In this respect, NMa has taken into account the fact that these agreements may have an added disadvantageous effect due to the economic context in which tenders for projects are issued and in a market in which a limited number of suppliers are active.

Cooperation in the construction sector is permitted under certain circumstances in accordance with the Decree in Relation to the Exemption of Joint Agreements [Besluit Vrijstelling Combinatieovereenkomsten]. This exemption only applies, however, to cooperation entered into in relation to a single tender (on an ad hoc basis). The cooperation in accordance with this framework agreement is an agreement of a structural nature between potential competitors and therefore contravenes the Competition Act.

NMa started this investigation following a complaint made by the Municipality of Amsterdam. The report contains a "reasonable suspicion" that the Competition Act has been infringed. The parties now have the opportunity to respond to the report. After this, NMa will take a final decision on whether an infringement has been committed and, if so, whether an order subject to a penalty and a fine will be imposed.

The report is the result of one of the investigations which NMa has started in relation to the construction sector. NMa imposed a fine on Heijmans in an earlier stage of this investigation due to its refusal to allow certain employees to be heard by NMa.