NMa fines demolition firms for illegal activities
Regulator to sit down with association for demolition firms to raise awareness of the Dutch Competition Act
Between 2005 and 2009, two Rotterdam-based demolition firms engaged in bid-rigging activities in four tenders for demolition contracts in Rotterdam. The two firms, Hofstede and Struijk Sloop en Grondwerken, have been fined EUR 56,000 and EUR 42,000 respectively.
Hofstede and Struijk distorted the tender procedures of these four projects by way of cover pricing. This means that one firm places a bid, known to the other firm, even though it does not have any actual interest in the contract. Its bid is higher than that of the other firm, thereby eliminating mutual competition. The firms’ real objective behind these cover bids is, with an eye to future tenders, to remain on the client’s long list. Bid-rigging constitutes a severe violation of the Dutch Competition Act. Tender procedures are the perfect moment for firms to compete with one another to bid for the client’s favor. These bid-rigging practices have thus misled the clients behind these four projects. In the past, the NMa already fined two construction companies, which were based in the southern region of the Netherlands, for similar activities.
The NMa will sit down with the Dutch Association for Demolition Contractors (Veras) to discuss measures to prevent anticompetitive behavior in tender procedures, for example, by setting up a compliance program. Such a program, in short, is a set of measures and procedures, embedding compliance of the Dutch Competition Act in firms’ operations. Chris Fonteijn, Chairman of the Board of the NMa, reacts: ‘At the end of the day, it is about how demolition firms in a competitive environment behave vis-à-vis each other and their clients and buyers.’
A number of cases against five demolition firms are currently pending. The NMa expects to complete those cases in the second quarter of 2013. Firms and/or individuals can confess their participation in a cartel the NMa’s Leniency Office. That could lead to fine immunity or to fine reductions. For more informatio, please consult the NMa’s Leniency Program.
Documents and publications
- Decision Slopersbedrijven Rotterdam (in Dutch)