NMa Imposes First Fines in Regular Sanctions Procedures in the Construction Industry
The Netherlands Competition Authority (NMa) has imposed the first fines in the construction sector within the framework of the regular sanctions procedures. This relates to 14 undertakings in the civil engineering and infrastructure sector (earthworks, roadworks and waterworks) and nine undertakings in the installation engineering sector (construction and maintenance of, for instance, mechanical engineering, electrical engineering and sprinkler installations).
NMa has imposed fines amounting to a total of approximately EUR 4.5 million on these undertakings. Last year, NMa imposed fines amounting to approximately EUR 100 million on undertakings in the civil engineering and infrastructure sector and EUR 40 million on undertakings in the installation engineering sector in the so-called accelerated sanctions procedures.
Background
In 2004 and 2005, NMa completed its report on its investigations into infringements of the prohibition on cartels in the installation engineering sector and the civil engineering and infrastructure sector. The undertakings involved and parts of these undertakings had participated in consultation, in groups of varying composition, prior to subscribing to tenders. This consultation was aimed at sharing the assignments amongst themselves and coordinating their bidding behaviour.
The undertakings involved were given the choice of participating in the so-called accelerated sanctions procedure or the regular sanctions procedure. The accelerated procedures for these subsectors were completed in March 2005 (344 undertakings in the civil engineering and infrastructure sector) and October 2005 (155 undertakings in the installation engineering sector). The accelerated procedures were developed specially by NMa to make it possible for construction companies to 'come clean' collectively and quickly.
Regular procedure
The undertakings which will now receive a decision opted for the regular procedure. Each of the undertakings may now present their own separate defence and contest their participation in the system of prior consultation. In both subsectors, fines have not been imposed on a number of undertakings because NMa, partly on the basis of the defences presented, was not able to determine that they had participated in the system of prior consultation. This relates to 6% of the undertakings in the civil engineering and installation sector and 4% of undertakings in the installation engineering sector involved in NMa's sanctions procedures.
The fines which NMa collects are transferred to the Treasury. The undertakings are obliged to pay the fines imposed within 13 weeks. The companies which have been fined may file administrative or judicial appeals.
Progress of investigations in the construction sector
These decisions almost conclude the sanctions procedures in the civil engineering and infrastructure and installation engineering subsectors. The regular sanctions procedures for the Civil Engineering & Utility Engineering Sector, the Cable and Pipeline Construction Sector and the Horticultural Services Sector will also be concluded before the end of 2006.
Undertakings and customers which issue contracts, which suspect that the Competition Act has been infringed in ways other than the infringements which have been ascertained in the construction sector up until now, can notify NMa of this. Undertakings may apply for leniency. On the basis of an application for leniency, undertakings may be granted fine immunity or a reduction in their fine ('leniency'), if they themselves notify NMa of cartels in which they are involved or were involved. A condition for this is that the companies apply individually to NMa's Leniency Office for leniency and provide valuable information. NMa has drawn up guidelines for this. NMa's Leniency Office can be reached at 070 330 1710, fax 070 330 1700 or e-mail: clementie [at] acm [punt] nl (clementie[at]acm[dot]nl).