Court of Justice of the European Union confirms: A bid-rigging infringement ends when the essential characteristics of the contract are concluded with the contracting authority

By Päivi Tammilehto

02-2021

On 14 January 2021, the Court of Justice of the European Union (CJEU) issued a preliminary ruling relating to a Finnish bid-rigging case stating that a bid-rigging infringement ends on the day the essential characteristics of the contract, in particular the price, are concluded with the contracting authority. The reference of the Finnish Supreme Administrative Court for a preliminary ruling relates to the question of the starting point of the limitation period during which a penalty for that infringement may be imposed.

In 2014, the Finnish Competition and Consumer Authority (FCCA) requested the Market Court to impose a fine upon Eltel Group Ltd and Eltel Networks Ltd for having participated in a bid-rigging cartel with Empower Ltd regarding the design and construction of electricity transmission lines in Finland. Empower was granted immunity following its leniency application and was therefore exempted from all sanctions.

Eltel’s most recent conduct, which the FCCA regarded to fall within the scope of the infringement was a public works contract for which the tender was submitted on 4 June 2007 and the contract signed on 19 June 2007. However, the FCCA argued that the effects of the single, continuous infringement prevailed while said contract was in force i.e. until 7 January 2010, the date on which the customer paid Eltel the final instalment of the price for the construction works. The Market Court rejected the application of the FCCA as time barred. According to Finnish competition law, the application to Market Court must be submitted within five years from the point at which the restraint of competition ended.

The FCCA appealed against the decision of the Market Court before the Supreme Administrative Court of Finland, which in turn referred the question of the duration of the infringement to the CJEU. According to the CJEU the cessation of an undertaking’s participation in an infringement of Articles 101 and 102 TFEU is concerned with the economic consequences of the coordination, rather than with their legal form. According to the CJEU, the duration of Eltel’s participation in the alleged infringement covers the entire period during which it implemented the anticompetitive agreement which it concluded, including the period during which the offer which Eltel had submitted was in force or could have been converted into a definitive contract between Eltel and the transmission network operator. In other words, in bid-rigging cases the restrictive effects of the cartel on competition disappear when the essential characteristics of the contract (in particular price) have been definitively determined as it is at that moment that the contracting authority is definitively deprived of the opportunity to obtain the goods, works or services in question under normal market conditions.

The Supreme Administrative Court of Finland has yet to issue its judgment applying the decision of the CJEU. The judgment of the CJEU (in English) can be found here and the press release of the FCCA (in Finnish) can be found here.

For more information please contact Päivi Tammilehto.

 
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