The Netherlands Authority for Consumers and Markets (ACM) is currently conducting an investigation into a possible cartel in the street-furniture and road-furniture market. As part of that investigation, ACM conducted a dawn raid earlier this month. ACM suspects that a number of suppliers had contacted each other in advance discussing the bids they would submit in several government tender processes involving street-furniture and road-furniture contracts.
Bid-rigging harms clients, and results in higher prices
Competitors cannot conclude any price-fixing agreements among each other about the prices they charge for their products or services. That also applies to bids in tender processes. Businesses cannot conclude any agreements (price-fixing agreements or otherwise) that determine who will win the contract. That would eliminate competition on price, quality and innovation.
What are the next steps in the investigation?
Over the next few months, ACM will assess whether competition rules have indeed been violated. ACM may come to the conclusion that the rules have not been violated. In that case, the investigation will be terminated. If ACM does establish a violation, it may result in sanctions such as fines.
Tender processes must take place in a fair manner
In tender processes, clients invite several businesses to submit bids for a specific contract. These businesses must determine their bids independently of the other bidders. Each business must decide (on their own and without any certainty about what the others will do) at what price and under what conditions it is prepared to do the job. Businesses cannot make any price-fixing agreements or exchange information about whether or not they will submit a bid, or about the price or conditions they will set. If they do, competition will be restricted, and the client will get an offer that is not competitive. As a result, the client will pay more or will get suboptimal conditions.
ACM and tender processes
ACM ensures that markets work well for people and businesses. Tender processes must take place in a fair manner. Competition rules apply to all companies, large and small alike. Businesses that rig their bids can be fined by ACM.
Interested in more information about what you should keep in mind when submitting bids or when setting up tender processes? Visit our site with information about tender processes (in Dutch).
ACM works together with PIANOo , the Dutch Public Procurement Expertise Centre, to give advice to clients in tender processes. PIANOo helps contracting authorities professionalize their procurement processes by giving advice, providing tools, and practical tips.
Do you have any tip-offs or would you like to report any illegal agreements?
If you have any indications that businesses, traders or buyers/sellers have concluded illegal agreements, please report those to ACM. Do you currently work in this sector? Please consider submitting your tip-off to ACM (which can also be done anonymously). Are you currently involved in a cartel? You have the opportunity to file a request for leniency.