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CARTELS: Collusion in public procurement in energy sector

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On November 24, 2014 the Division of Cartels of the Antimonopoly Office of the Slovak Republic, initiated ex officio the administrative proceedings against three undertakings acting in the energy sector in the matter of possible agreement restricting competition.

The Office has suspected the undertakings coordinated their bidding procedure in tender dealing with the supply of line producing equipment for production of electricity from the renewable resources in the total amount up to EUR 15 mil. These projects were implemented with support of EU funds. Such conduct of undertakings may be contradictory both to the Act No. 136/2001 Coll. on Protection of Competition and the Article 101 of the Treaty on the Functioning of the European Union which prohibit agreements between competitors restricting competition.

The Office acquired documents and information based on which it concluded that the undertakings might have coordinated their bidding procedure in tender.

The fact that the Office initiated the administrative proceedings does not imply that the entity concerned has infringed the competition rules, nor does it prejudge the conclusions which the Office may reach in its decision.

Since these agreement represent horizontal agreement between direct competitors, which is considered as the most serious infringement of competition rules, it means hard-core cartel, cartel participants may be fined up to 10 % of their turnover for the preceding closed accounting period.

The Office also states that a cartel participant has an option to fully avoid a fine if he was the first to provide, on its own initiative, decisive evidence to prove a violation of the prohibited agreement or was the first to provide, on its own initiative, information and evidence being decisive to perform an inspection or he may reach its reducing up to 50%. Detailed conditions of non-imposing or reducing a fine are summarized in the document “Leniency program”.