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NMa imposes fines in nationwide construction industry cartels

In the construction industry, the Netherlands Competition Authority (NMa) has imposed a second round of fines under regular sanctions procedures. This involves 32 undertakings in the building and housing sector [B&U] and two undertakings in the horticultural services sector.

The NMa imposes joint fines amounting to almost EUR 6 million. Last year, under a sanctions regime involving so-called fast-lane procedures, the NMa already imposed fines of EU 70 million on undertakings in the building and housing sector and fines of over EUR 3 million on undertakings in the horticultural services sector.

In the first round of fines under regular sanctions procedures (August 2006), the NMa imposed joint fines of approximately EUR 4.5 million on 14 undertakings in the road construction and civil engineering sector [GWW] and nine undertakings in the installation engineering sector.

In 2005 the NMa completed a series of investigations into infringements of cartel legislation in the subsectors of the construction industry under consideration. The undertakings involved participated in meetings prior to tendering for contract. These meetings served market splitting and bid rigging purposes.

The undertakings involved were given the choice of taking part in either so-called fast-lane sanctions procedures or regular, standard sanctions procedures. The fast-lane procedures involving these subsectors were completed in May 2006 (horticultural services: 54 undertakings) and in June 2006 (building and housing: 596 undertakings).

Regular procedures
Undertakings against which sanctions decisions have now been drawn up, opted for the regular sanctions procedures. Under these procedures, undertakings may set up an individual defence and contest their alleged participation in preliminary meetings. The NMa will refrain from imposing sanctions on 29 undertakings in the building and housing sector, as it has not been able to establish their involvement in systematic preliminary consultations, partly as a result of the defences mounted.

This also applies to two undertakings in the horticultural services sector. As concerns the cable and piping construction sector, the NMa will for similar reasons not impose sanctions on five undertakings that have entered regular sanctions procedures. The decisions outlined above finalise regular sanctions procedures in the building and housing, cable and piping construction and horticultural services sector, succeeding the road construction and civil engineering sector and the installation sector.

No fines for 18 asphalt producing construction companies
The NMa refrains from imposing fines on 18 road construction participating in asphalt plants. In 2002 an NMa investigation resulted in a statement of objections against 18 road construction companies, on suspicion of entering into cartel deals with regard to three asphalt plants in which they had participated. The alleged deals focused on asphalt pricing, planning and allocating asphalt production volumes, and future (de)investments in the asphalt plants concerned. Such deals restrict competition and are therefore not compatible with the Competition Act.

The NMa will not impose sanctions as the then alleged infringements of the Competition Act cannot be established without further investigation. The NMa has decided against further investigation, as the asphalt manufacturing sector has in the meantime been restructured, concerted practices among parties were terminated in 2002 and road construction companies have taken part in a major effort in the construction industry to 'come clean'.

Undertakings suspecting an infringement of the Competition Act other than the ones already established within the construction sector, may report this to the NMa and submit an application for leniency. On the basis of an application for leniency, undertakings may obtain immunity from fining or a fine reduction ('leniency'), if they themselves inform the NMa of cartels in which they participate or have participated. It is conditional that undertakings report with the Leniency Office on an individual basis and pass on valuable information. With a view to this, the NMa has drawn up guidelines. The Leniency Office may be contacted via 070 330 1710 (telephone), 070 330 1700 (fax) or email: clementie [at] acm [punt] nl (clementie[at]acm[dot]nl).