NMa imposes fines on two cartels of construction material producers

The Netherlands Competition Authority (NMa) has imposed fines amounting to EUR 5.5 million on a total of 18 construction companies for cartel agreements. The fines are based on two Statements of Objections, issued by the NMa towards the end of 2006.

Decorative paving products
The NMa has established collusive pricing strategies among nine producers of decorative paving in the period from 1 January 1998 up until 31 December 2005. With a view to settling deals, the parties concerned met at least twice a year, in autumn and in spring. During the autumn meeting, they coordinated price increases, partly on the basis of increased prices for raw materials. These arrangements subsequently determined price negotiations with purchasing parties, including garden centres and DIY markets, who sell the decorative paving products to consumers. The spring meetings provided an opportunity for evaluating results. Fines imposed in this case amount to well over EUR 2.2 million.

Prefab concrete floor elements
As from 1 January 1998 up until 31 December 2003, a number of producers of concrete floor elements gathered at least ten times a year in order to coordinate prices and allocate selling volumes. The total fine amount imposed in this case exceeds EUR 3.3 million. Concrete floor elements are used by construction companies in building projects, including private homes and and offices.

Cartel practices constitute a serious infringement of the Competition Act. Anti-competitive business behaviour adversely affects clients and consumers, as the level of prices is being increased due to a lack of 'normal' competitive relations. Market dynamics and market insecurity, particularly, reinforced by competitive pressure, stimulate businesses to cut costs, whilst also driving innovation. Consumers profit by lower prices and new products. In setting the level of the fines, the NMa has also taken into account that the cartel practices concerned were sustained over a long period of time, and continued well after publication of the final report of the Parliamentary Committee of Inquiry into the Construction Industry in late 2002.