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NMa completes administrative appeal procedures in construction industry

The Netherlands Competition Authority (NMa) has adopted 18 decisions on administrative appeal relating to the Housing & Utility sector [B&U] and the installation sector. With these decisions the NMa has concluded all administrative appeal procedures in the construction industry – more than 100 in total. The decisions on appeals follow the sanctions that the NMa imposed on more than a thousand construction firms in the accelerated and regular sanctions procedures earlier.

Fines are upheld in 6 of the 18 appeal cases now completed. The fine was reduced in 12 cases, due to the NMa granting a number of appeals. Among other things, it was found in the appeal phase that turnover figures in the benchmark year upon which the fine was based were not representative in comparison with the other years of the infringement period.

In 2005, the NMa concluded its reports of investigations into infringements of the cartel prohibition in the construction sector and the installation sector. Meeting in various groups, the companies concerned and their divisions had consulted each other prior to tendering for procurement contracts. These consultations were aimed at market-sharing and collusion of tenders. Such practices constitute a serious infringement of the Competition Act. Price fixing and exchanging competition-sensitive information are to the disadvantage of customers through restricting or to a large extent eliminating competition among parties. Due to this, prices are not established under 'normal' competition and consumers will ultimately be put at a disadvantage. The dynamics and insecurity of the market particularly, reinforced by competitive pressure from other market parties, are the main drivers that stimulate companies to save costs and innovate. The consumer benefits from this by lower prices, new products and better service.

Regular and fast-lane procedure
The decisions on administrative appeals now adopted involve both regular and fast-lane sanctions procedures. The relevant companies could themselves choose whether they wanted to participate in the so-called fast-lane procedure sanctions procedure or the regular sanctions procedure. The NMa specially developed the fast-lane procedure procedures to enable construction companies to 'come clean' collectively and quickly.

Suspicion of an infringement?
Companies and their clients who suspect that an infringement of the Competition Act has occurred, other than the ones that have already been detected in the construction industry, can report this to the NMa. Companies and finable natural persons can submit a leniency application. On the basis of a leniency application, companies and finable natural persons may obtain immunity from or reduction of a fine ('leniency') if they themselves provide information to the NMa about cartels they are or have been involved with. The condition is that they report to the NMa Leniency Office and provide valuable information. The NMa has drawn up guidelines for this. The NMa Leniency Office can be reached via number 070 330 1710 (telephone), 070 330 1700 (fax) or email: clementie [at] acm [punt] nl (clementie[at]acm[dot]nl). The NMa insists on emphasizing that the special way of dealing with the construction industry has come to an end. New investigations in this sector will be treated in the same way as any other case.