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The Antimonopoly Office of the Slovak Republic initiated the administrative proceedings in the matter of possible cartel agreement of construction companies in public procurement

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On December 12, 2013 The Antimonopoly Office of the Slovak Republic, The Division of Cartels, based on its own initiative, initiated proceedings against four undertakings, operating in the field of constructions, with regard to participation and bidding in public procurements financed from EU funds.

Based on the evidence gathered, the Office has justified suspicion that these four undertakings coordinated their bidding and tendering in the public procurement for reconstruction of the property providing social services in the total amount of more than 2 million EUR. The project was funded by the European Regional Development Fund and the state budget of the Slovak Republic. Public procurement would thus lose its purpose, which is to ensure the most efficient way of public resources use.  Such conduct may constitute an infringement of the Act No. 136/2001 Coll. on Protection of Competition as amended, which prohibits agreements between competitors restricting competition.

In order to confirm the suspicion and gather further evidence the Office, prior to proceedings, carried out unannounced inspections at the premises of several undertakings. During the inspections the employees of the Office acquired materials referring to the public procurement, including e - mail communication.

Cartels in public procurement (so-called "bid rigging ") are arrangements between some or all bidders in a tender. Cooperation may take the form of agreements on prices, sharing contracts or other form of coordination, including an agreement not to submit a bid or an agreement on rotation of contracts.

Since these agreements represent horizontal agreements between direct competitors, which are considered as hard-core cartels, cartel participant may be fined up to 10 % of their turnover for the preceeding closed accounting period. 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. Detailed conditions of non-imposing or reducing a fine are summarized in the document “Leniency Programme” /data/files/171_leniency-program.pdf

In case it is proved that bidder participated in the collusion in public procurement, such bidder shall not take part in public procurements for three years since a final decision confirming existence of an agreement restricting competition is issued. The prohibition does not apply to those who qualify for leniency under the leniency programme.

Initiation of proceedings neither implies that undertakings are guilty of anti-competitive behaviour, nor do they prejudge the outcome of the investigation itself.