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NMa Fines Horticultural Services Companies for Infringement of Prohibition on Cartels

The Netherlands Competition Authority (NMa) has fined eight undertakings active in the area of horticultural services for an infringement of the prohibition on cartels. NMa deems its proven that these undertakings consulted each other in 2004 and entered into agreements prior to five public tenders issued by the City of Maastricht. The tenders related to the maintenance of public parks and gardens in the period from 2004 up to and including 2006.

The fines were imposed on Kultuurtechniek Rooden B.V. (EUR 267,000); Krinkels B.V. (EUR 36,500); Henssen B.V. (EUR 106,500); BTL Uitvoering B.V. (EUR81,500); Dolmans Kultuurtechniek B.V. (EUR 302,500); Vaessen Maastricht Grondverzet en Groentechniek B.V. (EUR 167,500); Hoveniers en Bloemisterijbedrijf Hollanders B.V. (EUR 69,500); Hoveniersbedrijf Oosterloo B.V. (EUR 74,000).

Bid-rigging is a very grave infringement of the Competition Act. A tender is precisely the moment at which parties can and must compete with each other. It is important that the parties, which submit an offer, do not have contact with each other about the contract in question, as this significantly limits or may even entirely eliminate competition between them.

The fines have been determined in accordance with NMa's Guidelines for the Setting on Fines. The fines were increased by 30% because in 2004, after all the attention which society has given to cartel formation in the construction and related sectors, the undertakings should have understood better than ever before that consultation prior to tenders is prohibited and is fined severely.

In the case of five of these undertakings, which maintained public parks and gardens in Maastricht in the years prior to the tender, NMa took into account the attitude of the City of Maastricht. After all, despite the public tender policy which the municipality is required to adhere to, the municipality first examined ways of continuing the existing relationships with these undertakings. The municipality then proceeded to issue a public tender. After this, these undertakings engaged in bid-rigging to ensure that they would qualify for the maintenance work. The simple fact that the municipality discussed continuation of the existing relationships beforehand with the undertakings, does not justify an infringement of the Competition Act. Such a situation, however, may be a factor which NMa under certain circumstances must take into account in determining the level of the fine. The fines imposed on these undertakings were reduced by 30%.

Various undertakings have since reached a settlement with the municipality whereby the horticultural services undertakings will compensate the municipality for losses incurred. NMa has taken this into account by deducting part of this compensation from the fines to be paid.

Finally, it is important that the fines of two of the eight undertakings were reduced because of a made use of NMa's leniency programme. In other words, these companies voluntarily provided NMa with full disclosure of the practice in which they were involved (albeit after NMa had commenced its investigation). NMa offers a substantial reduction in the fine for this, in accordance with the Leniency Guidelines.

The decisions imposing the fines were taken on the basis of the report which NMa drew up following its investigation and the opinions of the undertakings in response to this report. The undertakings may file an administrative appeal with NMa or a direct judicial appeal with the Court of Rotterdam against these decisions.