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Belgian Competition Authority fines undertakings for bid-rigging in railway tender

Belgian Competition Authority fines undertakings for bid-rigging in railway tender

01.06.2017 EU law

On 2 May 2017, the Belgian Competition Authority (BCA) imposed a total fine of EUR 1,779,000 on five undertakings active in the sector of electrical switchgear for bid-rigging in relation to a tender issued by Infrabel (Belgian railway infrastructure manager).

The undertakings concerned were ABB (granted full immunity from fines due to its leniency application), Siemens (considered cartel leader), AEG, Schneider, and Sécheron. These undertakings were selected following a public tender issued by Infrabel based on their ‘Best and Final Offer’. A framework agreement was subsequently concluded. Within this framework, Infrabel issued a ‘Request for Quotation’ (RFQ) for each individual order allowing the selected undertakings to submit a specific unitary price. However, the undertakings decided among themselves which undertaking should be awarded the order in question and agreed not to underbid the price put forward. By dividing the orders placed by Infrabel the undertakings participated in a market partitioning cartel. This practice was considered a restriction of competition by object in violation of Article 101 TFEU and its Belgian corollary Article IV.1 of the Code of Economic Law. The undertakings concerned acknowledged the existence of these practices and agreed to a settlement procedure, for which they received an additional 10% discount on the fine.

It is interesting to note that Infrabel’s own conduct was considered a mitigating circumstance for the undertakings concerned, as it was found to ‘have rendered the market excessively transparent’ by communicating strategic information (including revealing details of some of the participants). Furthermore, it is interesting that in calculating the fine it was the effects of the infringement (up to 30 June 2016) that were taken into account and not the duration of the actual infringement (until 1 July 2014).

This settlement decision constitutes the first Belgian bid-rigging case, which ties in perfectly with the 2016 priority policy published by the BCA referring to public procurement, similar to the recent 2017 policy note. The BCA has also just launched an informational campaign on bid-rigging. Although bid-rigging can also be prosecuted by means of Article 314 of the Belgian Penal Code, the case at hand was dealt with by means of competition law.

This article was published in the Competition Law Newsletter of June 2017. Other articles in this newsletter:

  1. European Commission accepts Amazon's commitments in e-book probe
  2. Recent enforcement action emphasizes the importance of compliance with procedural EU merger rules
  3. European Commission publishes final report on e-commerce sector inquiry 
  4. European Commission issues new rules for State aid to ports, airports, culture and the outermost regions
  5. District Court of Amsterdam rules on the validity of the assignments and prescription of CDC's claims for damage in sodium chlorate cartel

Team

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