Unlawful Collusion in Road Construction: Crippling Taxes Levied by Federal Cartel Office
Unlawful Communications in Infrastructure Project: Federal Antitrust Authority Levies Heavy Penalty in Millions Due to Road Construction Misconduct - Federal Competition Authority Levies Millions in Penalty
Hey there! Let's dive into some shady shenanigans in the world of road construction.
The Federal Cartel Office has called out some unsavory activities, alleging that illegal cartel agreements were in place between 2016 and 2019. Andreas Mundt, the president of this Bonn-based authority, stated that the cartels fixed tender results by deciding which company would win each competition beforehand. In many instances, other companies would place "cover bids" with prearranged minimum prices.
According to Mundt, open competition is essential for the public sector to secure goods and services economically and efficiently. However, these unlawful cartel agreements can lead to severe damages that affect all citizens in the long run.
In 2018 and 2019, four companies divided up clients in Saxony, Thuringia, and Saxony-Anhalt. These shady characters even employed a secret "code language" to confirm who would participate in tenders and submit which cover bids.
The story doesn't end there. The same four companies were found to have colluded in tenders in Brandenburg and Saxony-Anhalt, sometimes extending their schemes to Mecklenburg-Western Pomerania, during the same time frame. One company was involved in both cases.
The tenders concerned simple road repairs or the supply of materials like bitumen emulsion or gravel. The contract volumes typically ranged from 40,000 to 200,000 euros.
In 2019, the Federal Cartel Office, in combination with the Public Prosecutor's Office in Düsseldorf, executed several raids. One company even played ball within the leniency program.
- Federal Cartel Office
- Millions in penalties
- Cartel agreement
- Road construction
- Andreas Mundt
- Bonn
- Saxony-Anhalt
As for a broader perspective on cartel cases in Germany, recent examples reveal some alarming trends:
- Cartel Agreements in Road Repair: Seven road repair companies faced a EUR 10.5 million fine for bid-rigging and customer allocation, affecting simple road repair tasks like crack filling and surface patching, as well as grit and bitumen emulsion supply[1][2].
- STRABAG SE: A major construction conglomerate, STRABAG SE, was penalized EUR 2.79 million for an illegal bidding agreement related to the renovation of the Zoobrücke bridge in Cologne, highlighting the broader issue of cartel agreements in the construction sector[3].
It's crucial to note that there's no specific data about the effects of cartel agreements on road construction in Saxony, Thuringia, Saxony-Anhalt, Brandenburg, and Mecklenburg-Western Pomerania. However, cartel practices generally lead to increased costs and reduced competition, potentially harming public infrastructure projects by limiting options and boosting service prices[1][2].
[1] Bundeskartellamt. (n.d.). Cartel agreements in road construction. Retrieved from https://www.bundeskartellamt.de/SharedDocs/Pressemitteilungen/DE/2021/02_2021/ar008.html[2] Reuters. (2021, February 16). Seven German road repair companies fined over EUR 10 million for illegal price fixing. Retrieved from https://www.reuters.com/business/aerospace-defense/seven-german-road-repair-companies-fined-over-eur-10-million-illegal-price-fixing-2021-02-16/[3] Handelsblatt Global. (2020, August 4). For STRABAG, a fine of 2.79 million euros for price manipulation. Retrieved from https://www.handelsblatt.com/unternehmen/ Bauindustrie/ fur-strabag-strafe-von-279-millionen-euro-fuer-preismanipulation/26670104.html
- The unlawful collusion in road construction has led to severe damages that affect citizens, resulting in increased costs and reduced competition.
- Understanding the impact of such anticompetitive practices on the industry, a major construction conglomerate, STRABAG SE, was penalized for an illegal bidding agreement related to a bridge renovation in Cologne.
- In instances of cartel agreements in the road repair sector, companies have faced millions in penalties for bid-rigging and customer allocation, resulting in higher costs for general-news and potentially harming public infrastructure projects.
