NMa first fines regular sanctions procedures construction industry

13 November 2006

Natascha Linssen

The Dutch 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 and nine undertakings in the installation engineering sector.

NMa has imposed fines amounting to a total of approximately €4.5 million on these undertakings. Last year, NMa imposed fines amounting to approximately €100 million on undertakings in the civil engineering and infrastructure sector and €40 million on undertakings in the installation engineering sector in the so-called accelerated sanctions procedures.

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 consulted with each other, in groups of varying composition, prior to submitting tenders, in order to share assignments amongst themselves and coordinate 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.

The undertakings subject to the current decision opted for the regular procedure. Each of the undertakings will be able to present their own separate defence and contest their participation in the information exchange. 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 exchanged information. 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 companies which have been fined may file administrative or judicial appeals.

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.

In addition several construction companies participated in the so-called accelerated sanctions procedure of the NMa and gave a clear indication that they wanted to ‘come clean’. Furthermore these companies contributed financially to a fund meant for the indemnification of the customers of these companies who are public bodies that suffered loses as a consequence of the fraud committed by the construction companies. The NMa was satisfied with these contributions and therefore reduced the fines to a total amount of €53 million.

The decision to put an end to the judicial procedures against the NMa is an important step forward to close the ‘old construction cases’.


Source: Press Release NMa, 4-09-2006 and press Release NMa, 18-09-2006 at www.nmanet.nl