Behind the User-Paid Cartel in Road Construction: Federal Cartel Office Issues Massive Fines
Unlawful Partnership in Road Building: Bureau of Federal Cartels Levies Heavy Penalty Millions in Fines - Millions in penalties levied by the Federal Cartel Office
In a startling revelation, the Federal Cartel Office uncovered red-handed criminal tactic schemes in the road construction sector from 2016 to 2019. These illicit strategies involved price-fixing agreements among corporations, with predetermined winners emerging before tenders were even announced.
In many instances, competing companies intentionally submitted 'cover bids' - quotes following a prearranged minimum amount, all aimed at making the game one-sided.
"Competition is the lifeblood of a thriving economy, especially in public sectors where goods and services should be attainable at the most cost-effective rate," asserts Andreas Mundt, President of the Bonn-based authority. Unfortunately, such cartel agreements can inflict substantial damage on the economy, which ultimately weighs heavily on citizens.
Road construction kings in Saxony, Thuringia, and Saxony-Anhalt wielded their power collaboratively in 2018 and 2019. An unspoken language, coined 'code language,' occasionally surfaced in these discussions to clarify each company's participation in a particular tender and their corresponding cover bids.
Things turned ugly once more for four additional companies, colluding in tenders across Brandenburg and Saxony-Anhalt, with occasional ventures into Mecklenburg-Vorpommern, from 2016 to 2019. Curiously, one of these companies was implicated in both cases.
From simple road repairs to the supply of bitumen emulsion or gravel, these contracts varied in volume between 40,000 to a whopping 200,000 euros.
In a 2019 crackdown, the Federal Cartel Office, backed by the Public Prosecutor's Office in Düsseldorf, conducted a series of raids. One company chose to cooperate under the leniency program.
- Federal Cartel Office
- Massive Fines
- Cartel agreement
- Road construction
- Andreas Mundt
- Bonn
- Saxony-Anhalt
The Federal Cartel Office, in a mass enforcement action, is expected to levy significant fines on various companies involved in a cartel agreement that manipulated road construction tenders in Saxony, Thuringia, Saxony-Anhalt, Brandenburg, and occasionally Mecklenburg-Vorpommern from 2016 to 2019.
The collusive behaviors, including cover bids and the use of a 'code language' to ensure certain companies were picked for projects, were orchestrated to artificially restrict competition in the industry, ultimately impacting the finance of the general public.
Andreas Mundt, the President of the Federal Cartel Office, emphasized the detrimental effects of such cartel agreements on a thriving economy, stating, "Competition is the lifeblood of a thriving economy, especially in public sectors where goods and services should be attainable at the most cost-effective rate."
