Anti-competitive industry: Authorities have imposed more big fines on construction cartels

The last few years have seen both national competition authorities and the European Commission prosecute major cartels in the construction industry.

Most striking have been the actions of the Dutch Competition Authority (NMa) which has fined almost 1400 companies-either contractors or suppliers to the industry-a total of € 239 million (US$ 320 million) since 2005.

Other national cartels have been successfully prosecuted in Finland, Slovakia, Sweden and the UK in the last year.

However, some of the biggest fines have been imposed by the European Commission, which is responsible for ensuring competition at the international level of the EU.

In February this year the Commission handed out the biggest fines in its history when it found five elevator and escalator manufacturers had colluded to fix prices in Belgium, Luxembourg, Germany and The Netherlands between 1995 and 2004.

The fines levied against Kone, Mitsubishi, Otis, Schindler and Thyssenkrupp totalled € 992 million (US$ 1.33 billion).

By far the largest fine-€ 480 million (US$ 643 million)-was given to Thyssenkrupp, which the Commission described as a “repeat offender”, having been prosecuted in 1998 for being part of a stainless steel cartel.

There are also investigations currently underway around Europe, which seem likely to result in more prosecutions.

In the UK the Office of Fair Trading is working on a case against 57 companies working on “thousands of tenders” with a total value of UK£ 3 billion (US$ 6 billion).

Given that 37 of the companies are said to have admitted their guilt in exchange for reduced fines, prosecutions seem sure to follow.

This type of leniency programme, where companies that bring cartel activities to the attention of authorities are either exempt from prosecution or get a reduced fine, is a feature of many European countries’ competition laws.

The European Commission operates a similiar scheme