Technical building companies fined by FCO

By Dr. Joerg Witting, Marcio da Silva Lima

06-2020

In December 2019 the Federal Cartel Office (“FCO”) imposed fines totalling EUR 110 million on eleven providers of technical building services for collusion in the award of major contracts.

The proceedings were initiated in November 2014 following a leniency application. The leniency application was made knowing that the media was about to issue reports of suspected collusion in connection with the award of contracts for the supply of technical building services for the black coal-fired power plants in Hamm-Uentrop in Germany and Eemshaven in the Netherlands. In the days following the publication of the reports three other companies agreed to cooperate with the FCO under the leniency program.

In close cooperation with the public prosecutor's office, the FCO carried out investigations which extended the investigation of collusion in the provision of technical building services to other power plant projects and other large-scale construction projects. The investigations revealed that numerous leading companies in the sector had colluded to award major contracts and excluded competition among themselves for years.

The anti-competitive conduct involved agreements by which some cartel members submitted sham offers during tenders designed to protect other cartel members, e.g. in exchange for sub-contracts, monetary compensation or similar sham offers in other tenders. The alleged conduct concerns the design and installation of technical equipment for large building complexes such as power plants, industrial installations, shopping centres or office buildings. Technical building services include the following disciplines: “mechanics” (sanitation, heating and air-conditioning), “electricity” (electronics, measurement and control technology) and “fire protection” (e.g. sprinkler systems). The agreements were predominantly in the “mechanics” area. The order values varied between approx. EUR 4 and EUR 35 million andin one case reached EUR 100 million. In total, the FCO identified anti-competitive practices in 37 different award procedures between 2005 and 2014.

For further information on the decision please click here (in German and English).

For more information contact Dr. Jörg Witting and Marcio da Silva Lima