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CARTELS: Suspicion from collusion in procurement of information and communication technology

On November 24, 2014 the Antimonopoly Office of the Slovak Republic, Division of Cartels initiated the administrative proceedings against two undertakings in the matter of possible cartel agreement grounded in coordination of their conduct in public procurement referring to modernisation of information and communication technology at the University financed by the state budget and European Union funds in the total amount of EUR 7,14 million incl. VAT.

The documents and information, based on which the Office initiated the administrative proceedings, indicate that two undertakings might have agreed on winner of the public procurement, consequent compensations through subcontracts or they might coordinated their conduct in this public procurement in other way.

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.

If it is proved that the bidder participated in public procurement collusion, he/she is not allowed to participate in public procurement for a period of three years from the final decision proving the existence of an agreement restricting competition. This prohibition does not refer to undertaking which fulfilled the conditions for non-imposing or reducing of fine according to leniency programme.

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” ( Program zhovievavosti (tzv. leniency program).