The Spanish Competition Authority ("CNMC") has fined 19 assembly and maintenance companies operating in the energy and petrochemical sectors €54.2 million, and fined 8 directors €0.28 million, for big-rigging practices following a leniency application submitted by one of the companies.
| what you need to know - key takeaways |
- The case reflects the CNMC's continued focus on stamping out bid-rigging (both in the public and private sector).
- The case also shows the CNMC's willingness to use new legal tools to deter anticompetitive conducts such fining directors of infringing companies and banning companies from participating in future public tenders.
- It is the third time that the authority has used its power to ban public tendering, again leaving the National Consultancy Board for Administrative Contracting to determine the scope and duration of the ban.
|
The CNMC concluded that the companies engaged in a cartel between 2001 and 2017 to share, at least, 746 bidding contracts (all private sector with the exception of one public contract) among themselves, which would have affected around 20 clients in the energy and petrochemical sectors. According to the authority, this is a sector in which contracting usually takes place through private tenders, as assembly and maintenance requires complex and specific safety, industrial quality and environmental standards.
The CNMC considered proven at least 18 meetings among the infringing companies in which they agreed to allocate customers, tenders, exchange commercially sensitive information, propose "cover offers" in tenders, as well as set prices and compensation. In addition, the coordination methods among the companies evolved over time due to the long duration:
- At a first stage, the designated awarding company sent its offer to the others so they could increase theirs by a certain percentage; and
- At a second stage, an Excel file was circulated among the companies in which they indicated the prices, offers, companies submitting bids and the designated awarding companies.
The investigation follows a leniency application submitted by one of the companies, which was exempted from paying a fine (although one of its directors was fined €42,400 since he refused to cooperate with the CNMC). In addition, another company that cooperated with the authority was granted a 50% reduction in its fine.
In addition to the fines imposed on the companies and directors, the CNMC has used the procedure previewed in the Public Procurement Law (Law 9/2017) to ban the infringers (with the exception of the companies that participated in the leniency programme) from submitting public tenders, for the third time (see here and here). As in previous cases, the CNMC did not determine the scope and duration of the prohibition, which will have to be determined by the National Consultancy Board for Administrative Contracting.
This case shows the interest of the authority in using new legal tools to deter anticompetitive practices such as the possibility to fine directors of the infringing companies, or to impose a ban from submitting public tenders (even though the large majority of the cartel concerned the private sector).
