NMa Fines 12 Roofing Companies for Cartel Agreements

The Netherlands Competition Authority (NMa) has imposed fines on 12 roofing companies for entering into agreements with each other in relation to five tenders in the roofing branch. The level of the fines imposed varies from € 3,900 to € 326,800 and amount in total to € 1,056,600. No fine immunity or reductions in the fines were requested on the basis of the Leniency Guidelines.

Prohibited cartel agreements were entered into in relation to the following tenders: a tender by Emmtec in 1999 for various roof renovation works (project turnover € 556,525); a tender by the municipality of Gouda in 1999 for the renovation of the roof of the sports hall 'De Springers’ (project turnover € 179,923); a tender in 1999 for the renovation of the roof of Amsterdams Academisch Medisch Centrum (AMC) (project turnover € 1,693,000); a tender in 1999 by Philips for the renovation of the roofs of three buildings in Drachten (project turnover € 61,260; and a tender in March 2003 by Woningbedrijf Vestia in Rotterdam for the renovation of the roof of a housing complex (project turnover € 54,530).

The fines are imposed on the following companies (the fines per company are stated in brackets):
- Cazemier Dakbedekking Rotterdam B.V. (€ 3,900 in relation to a tender by Vestia in 2003);
- Consolidated Nederland B.V. (€ 4,200 in relation to a tender by Vestia in 2003, € 232,000 in relation to a tender by AMC, € 39,000 in relation to a tender by Gouda and € 23,000 in relation to a tender by Emmtec, in total € 298,200);
- Dakbedekkingsbedrijf Boko B.V. (€ 93,000 in relation to a tender by AMC);
- Erdo B.V. (€ 232,000 in relation to a tender by AMC, € 19,000 in relation to a tender by Gouda;
- € 70,000 in relation to a tender by Emmtec and € 5,800 in relation to a tender by Philips, in total € 326,800);
- Smid en Hollander Bouw B.V. (€ 32,000 in relation to a tender by Emmtec);
- Spuitco, Asfalt en Spuitwerk, Dakbedekking B.V. (€ 19,000 in relation to a tender by Gouda);
- Strijland Dakbedekking B.V. (€ 93,000 in relation to a tender by AMC);
- Swindak B.V. (€ 93,000 in relation to a tender by AMC);
- Templefields 505 B.V. (previously trading under the name of Kimmenade) (€ 23,000 in relation to a tender by Emmtec);
- Texa Dakbedekkingen B.V. (€ 3,900 in relation to a tender by Vestia in 2003);
- Van Venrooy B.V. (€ 44,000 in relation to a tender by Emmtec);
- Witteveen Daktechniek Noord B.V. (€ 21,000 in relation to a tender by Emmtec and € 5,800 in relation to a tender by Philips, in total € 26,800).

NMa deems it proven that the companies involved entered into prohibited agreements beforehand in relation to each tender. In the case of three tenders, the companies approached by the customer exchanged information regarding their offers prior to the date of the tender and restricted competition between them by agreeing who would carry out the work. In addition, agreements were made with regard to a ‘subscription fee’. The party awarded the assignment is required to pay this ‘subscription fee’ to the other subscribers to the tender, which resulted in an increase in the price. As a result of the prohibited agreements, competition was distorted and the various customers suffered a loss.

These are very grave infringements of the Competition Act. Four tenders took place in 1999 and one tender occurred at the end of March 2003. The companies involved were aware that their mutual agreements were prohibited, which NMa considered to be an aggravating circumstance which resulted in an increase in the fine. In the case of the tender which occurred at the end of March 2003, in other words after the conclusion of the parliamentary inquiry into the construction industry, the fine was increased further due to the fact that the companies involved could have realised more than in the preceding period that their practice was prohibited. An additional increase in the fine was also applied in one case because the parties presented the customer before the tender with a signed declaration in which they promised not to enter into agreements with regard to ‘subscription fee’. With regard to one company, NMa applied an ex officio reduction in the fine because the company’s cooperation in the investigation has been more extensive than it was legally required. To determine the level of the fine, NMa applied its Guidelines for the Setting of Fines.

Since the start of its investigative activities into the construction sector at the end of 2001, NMa has fined 35 construction companies, including these new decisions, for entering into price fixing and market sharing agreements, and for prohibited bid rigging. The infringements occurred after the Competition Act came into force on 1 January 1998.