Dutch construction cartel fined

01 May 2008

Fines totalling more than € 100 million were handed down to 345 Dutch and foreign construction companies by the Netherlands Competition Authority (NMa) last month. The fines are the result of an investigation launched by the NMa in October last year following the voluntary notification of illegal acts by 140 companies (see CE November 2004).

The companies fined last month were part of a 400-strong group active in the earthworks, road construction and hydraulic engineering sectors, which were accused of participating in a cartel between 1998 and 2001. Some of the companies were also fined for market sharing agreements on a number of large infrastructure projects, including the Dutch high-speed rail link, HSL Zuid.

The companies all agreed to an accelerated sanctions procedure developed by the NMa for this case. This reduced the time span of the investigation, which could have taken years using the normal approach.

In accepting the fast-track procedure the companies effectively admitted their illegal activities and were offered a -15% reduction in fines. Under the procedure, the companies were not heard individually but were represented by the former chairman of the Dutch employers' organisation VNO-NCW, Mr J C Blankert.

The fines imposed on the 345 companies varied from € 1363 up to € 18,84 million. Dutch construction companies Royal BAM Group, Heijmans and Ballast Nedam were all involved and were given fines of € 18,8 million, € 14,4 million and € 4,1 million, respectively.

A spokesman for Heijmans said, “Numerous measures have now been taken aimed at preventing tendering for work based on price fixing agreements. Heijmans is pursuing a ‘zero tolerance’ policy in this matter.”

Under NMa rules, the penalised companies have 13 weeks to settle their fines. However, more than 120 organisations have applied to have their fines reduced due to payment problems. The NMa has agreed to accept payment in instalments from 75 companies but more than € 63 million has already been paid or promised before the 13 week deadline. All the fines collected by the NMa will be transferred to the Dutch treasury.

A further 20 companies involved in the cartel received fixed fines of € 4000 after the procedure showed that none of their turnover came from tenders in the infrastructure and civil engineering sector.

Another 34 companies chose not to participate in the fast-track investigation and the NMa has now started sanctions procedures against them.

The NMa is also carrying out investigations into other parts of the construction sector.

The results of its inquiries into the installation market were expected as CE went to press

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