NMa completes administrative appeal procedures for various construction industry subsectors

The Netherlands Competition Authority (NMa) has adopted 28 decisions on administrative appeal relating to the Civil Engineering and Infrastructure sector [GWW], the Installation Engineering sector (involving the construction and maintenance of, amongst others, mechanical works, electrotechnical works and sprinkler installations), as well as the Horticultural Services sector. The NMa thus brings the number of completed appeal cases relevant to the construction industry up to a total of 72. The decisions on appeal follow the imposition of NMa fines on more than a thousand construction companies during 'fast-lane' and regular sanction procedures. As for now, the NMa is still handling about 40 administrative appeal cases relating to the construction industry.

Fines are upheld in 20 out of the 28 appeal cases now completed. In 8 instances the fine is being lowered, due to the NMa granting a number of appeals. Among other things, it was found that turnover figures of the benchmark year providing the fine base were not representative when compared to other years in the infringement period.

Background
In 2004, 2005 and 2006, the NMa drew up a series of Statements of Objections with regard to infringements of cartel legislation in the Civil Engineering and Infrastructure sector and the Horticultural Services sector. In the procurement process, prior to tendering for contract, the companies met in various groups in order to make bid-rigging arrangements. Such practices constitute a serious infringement of the Competition Act. Price-fixing and an anti-competitive exchange of information have a harmful effect on buyers through restricting or to a large extent ruling out competition. As a result, prices cannot be established under 'normal' competitive processes and consumers will be put at a disadvantage. Market dynamics and market insecurity particularly, reinforced by competitive pressure exerted by other market parties, will trigger companies to introduce cost-saving changes and to innovate.

Regular and 'fast-lane' procedure
The decisions on administrative appeal now adopted have regard to both regular as well as 'fast-lane' procedures. The companies concerned were given the option of participating in either the so-called 'fast-lane' sanctions procedure or regular sanctions procedure. 'Fast-lane' procedures were specially designed by the NMa in order to make it possible for construction companies to 'come clean' collectively within a relatively short period of time.

In case you suspect an infringement
Companies and clients suspecting an infringement of the Competition Act other than the ones already established within the construction sector may report this to the NMa and submit an application for leniency. On the basis of an application for leniency, companies may obtain immunity from fining or a fine reduction ('leniency'), if they themselves inform the NMa of cartels in which they participate or have participated. It is conditional that companies report with the Leniency Office on an individual basis and pass on valuable information. With a view to this, the NMa has drawn up guidelines. The Leniency Office may be contacted via 070 330 1710 (telephone), 070 330 1700 (fax) or email: clementie [at] acm [punt] nl (clementie[at]acm[dot]nl).