On September 16, 2024, the Federal Competition Authority filed an application with the Cartel Court for the imposition of a fine against Malaschofsky (press release dated September 18, 2024). On November 25, 2024, the Cartel Court imposed the requested fine on Malaschofsky. The decision is final.
Malaschofsky participated directly in price fixing, market sharing and exchange of information with competitors in relation to public and private tenders for civil engineering works in Lower Austria in the period from at least February 2003 to May 2017 as an indirect participant, in line with its regional focus. These direct anti-competitive actions by Malaschofsky are part of an infringement affecting the whole of Austria, in which the companies involved participated to varying degrees.
Malaschofsky cooperated with the AFCA outside the leniency program to fully clarify the facts of the case and, in this context, made a comprehensive statement for the proceedings before the Cartel Court. The AFCA therefore requested a reduced fine. When setting the amount of the fine, the AFCA and the Federal Cartel Prosecutor also took into account economic performance.
Background
The uncovered cartel affects the construction industry, with a focus on the road construction sector.
The infringement affects the entire Austrian federal territory, albeit to varying degrees depending on the company involved. Both public and private clients are affected. A large number of construction projects are involved and the investigations by the Federal Competition Authority are still ongoing. In some cases, the proceedings have already been concluded with legally binding effect.
As part of the infringement, agreements were made between the participating companies to help each other win contracts and thus, among other things, secure market shares and maintain a corresponding capacity utilization. In order to achieve this common goal, price fixing, market sharing, the exchange of sensitive information, such as voting on future behavior when submitting offers, as well as the occasional formation of cartel-law-violating working and bidding consortia.
Among other things, the companies involved agreed on the winner of the tender, the price to be quoted and the submission of “cover offers”, or decided that certain competitors should not submit any offers at all.
FAQ Construction Cartel Update January 2025
Further information and developments in the construction cartel can be found in the FAQ Construction Cartel Update January 2025.
Fines under the Cartel Act
The Cartel Act prohibits practices that impede or distort competition. These include price fixing or the division of markets or territories. If a violation is established, the Cartel Court may, at the request of the BWB, impose fines of up to 10% of the total turnover in the previous financial year. The fines are determined by taking into account the severity and duration of the infringement, the fault and the economic capacity and cooperation of the company concerned.