Accelerated sanctions NMa

13 April 2006

Natascha Linssen

December 2005

The NMa has completed cartel investigations into a large number of companies which carry out cable and pipeline projects, provide in horticultural services and manufacture concrete products. To expedite the cases, the NMa will apply an accelerated sanctions procedure, as it has done previously in other sectors of the construction industry. The NMa received the information which prompted the investigations after it appealed to undertakings in the construction sector to come clean.
  • The NMa suspects that 87 undertakings in the construction industry who carry out cable and pipeline projects infringed the Competition Act in the period from 1 January 1998 up to and including December 2001. The undertakings constitute a considerable number of the undertakings who construct, connect, replace and maintain sub-terrestrial and terrestrial cables and pipelines and also install or replace meters. The undertakings involved colluded prior to responding to tenders for cable and pipeline projects. They instituted a national system which divided projects amongst the participants and co-ordinated their bidding behaviour. 22 of the 87 undertakings applied for leniency.

  • The NMa has also started an accelerated sanctions procedure against 59 companies active in the horticultural services sector. The NMa suspects that these undertakings infringed the Competition Act in the period from January 1998 until the end of 2001. The companies colluded prior to tenders for the construction and maintenance of green areas, such as mowing verges, maintaining parks and laying out public gardens or planting trees. The NMa believes that the undertakings agreed prior to the date of the tender which of them would submit the lowest bid. In this case, 13 undertakings applied for leniency.

  • A further investigation conducted by the NMa has resulted in three cases in three different sub-segments of the concrete sector. In the first case, the NMa suspects that 21 manufacturers of concrete paving stones met periodically, at least from 1 January 1998 up to and including mid-2001, to divide the supply of concrete paving stones amongst themselves. The NMa believes that nine undertakings which produce pre-fabricated concrete piles colluded during the period from January 1998 up to and including December 2001, by making agreements with regard to their market shares. The NMa also suspects that four undertakings which produce concrete floor elements had from January 1998 up to and including March 2003, entered into agreements with regard to each other's sales volumes. More than half of the undertakings involved applied for leniency

The NMa considers that bid-rigging is a very grave infringement of the Competition Act. If the parties who submit an offer contact each other in relation to specific contracts this will significantly restrict or even eliminate competition between them. This is even the case when undertakings, such as the manufacturers of concrete products, enter into agreements with each other about their sales volumes. The NMa has proposed an accelerated procedure to the parties to enable them to 'come clean' quickly. To encourage companies to opt for this procedure, the NMa will reduce the fines to be imposed on companies which co-operate in this procedure by 15%.

The NMa has made investigating the construction industry a priority. By the end of 2005 the NMa had sent reports to approximately 1440 undertakings in the construction industry and related sectors, setting out its reasons for believing that the Competition Act had been infringed. Sanctions have already been imposed on approximately 400 of these undertakings in the construction industry. It is expected that fines will be imposed in the second quarter of next year on undertakings in the civil engineering and utilities construction sector, which have co-operated in the accelerated procedure.

Source: NMa press release of 30 November 2005, available at http://www.nmanet.nl