NMa completes appeal procedures in Dutch construction industry

The Netherlands Competition Authority (NMa) has taken 18 decisions on appeals relating to the Dutch non-residential construction subsector and the specialty trade contractor subsector. Having taken these decisions, the NMa has thus completed all appeal procedures related to the construction industry – more than 100 in total. These decisions on appeals were the result of the sanctions that the NMa had imposed on more than a thousand construction firms in the fast-lane and regular sanctions procedures earlier on.

Fines are upheld in six of those 18 completed appeal cases. The fines in 12 cases are reduced because the NMa granted several appeals in those cases. It turned out in the appeal phase, among other things, that turnover figures in the benchmark year that is used to determine the fine were not representative of turnover figures in other years of the violation period.

Background
The NMa concluded in 2005 its investigations reports into violation of the prohibition of cartels in the Dutch construction industry and in the specialty trade contractor subsector. The companies in question and their divisions consulted with each other (exact line-up of those meetings often varied) prior to tendering for procurement contracts. The objectives of these meetings were to distribute the market and to harmonize each other's behavior during the tendering process. These practices constitute a serious violation of the Dutch Competition Act. Price-fixing and exchanging competition-sensitive information put customers at a disadvantage, since these practices significantly impede competition, or even largely eliminate competition altogether. Prices are thus not determined through 'normal' competition, leaving consumers paying the price in the end. Undertakings will start to innovate and to save costs when they are confronted with the dynamics and uncertainties of the market, which can partially be attributed to competitive pressure from other market parties. Consumers benefit from competition through lower prices, new products and better service.

Fast-lane and regular procedure
The decisions on appeals that have now been taken involve both the regular and fast-lane sanctions procedures. The companies concerned were given a choice between the so-called fast-lane sanctions procedure or the regular sanctions procedure. The fast-lane procedures had been specially developed by the NMa to enable construction companies to collectively and swiftly 'come clean'.

When a violation is suspected
Companies and their clients who suspect that the Competition Act is violated (other violations than the ones that have already been detected in the construction industry) can report their suspicions to the NMa. Companies and natural persons that are liable to a fine can apply for leniency. Such an application may result in companies and natural persons liable to a fine having their fines reduced or escaping their fines completely ('leniency'), provided that they submit information to the NMa about cartels in which they are currently or have been involved.

Reporting to the NMa Leniency Office and providing valuable information form a condition for being granted leniency. The NMa has drawn up guidelines on how to apply for leniency. The NMa Leniency Office can be contacted by phone at +31 70 330 1710, by fax at +31 70 330 1700 or by email at clementie [at] acm [punt] nl (clementie[at]acm[dot]nl).

The NMa wants to emphasize that the special approach of handling the cases relating to the construction industry has come to an end. New investigations in this industry will no longer be treated differently, and will be handled like any other case.