PORR AG and some of its subsidiaries (together referred to as “PORR Group”) took part in illegal price fixing, market divisions and the exchange of information with competitors in relation to public and private construction tenders in Austria.
Imposition of the fine
PORR Group fully acknowledged the infringement to the Austrian Federal Competition Authority (AFCA), declaring its involvement in the infringement as well as its willingness to settle the case (cf. AFCA’s press release of 30 September 2021).
In addition to its acknowledgement, PORR Group’s cooperation (outside the leniency programme) in clarifying the case and its far-reaching compliance measures, among them legal unbundling with regard to asphalt mixing plants, were all taken into account when setting the amount of the fine.
The Cartel Court imposed the fine of EUR 62.35 million on 17 February 2022 (26 Kt 5/21m), as requested by AFCA on 29 November 2021. PORR Group was found to have infringed Austrian (Sec. 1 Austrian Cartel Act) and EU (Art. 101 TFEU) antitrust rules prohibiting anticompetitive agreements. The decision is now final.
Breach of cartel law
The cartel related to the construction industry, comprising nearly all segments in the field of building construction and civil engineering, particularly road building. The breach covers the entire Austrian territory, albeit to varying degrees, and a large number of construction projects. The AFCA is still investigating the majority of the companies with alleged involvement. PORR Group’s considerable role in the cartel concerns the period from July 2002 to October 2017.
The companies involved in the cartel engaged in concerted action with the intent of reducing or excluding competition, helping each other to win construction contracts and thus securing market shares. To reach this common goal, they engaged in illegal price fixing and market divisions, exchanged competitively sensitive information, relating for example to agreements on future collusive bidding behaviour, and formed anti-competitive working groups and bidding consortia. A large number of public and private clients were affected by these practices.
The companies implemented such practices taking due account of regional circumstances and the relevant construction segment. Their action comprised in particular bilateral and multilateral contact in the form of regular or case-by-case rounds of talks, contact by telephone, e-mail or fax, and the sending of cover bids.
This evolved into an Austria-wide, generally established system of collusion, in which companies informed each other about their bidding and market behaviour and subsequently coordinated their actions accordingly. In this way the construction companies involved helped each other to win contracts with little if any fear of a competitor undercutting them.
Previous AFCA investigations into the construction industry
For more details about AFCA’s investigations into the Austrian construction industry, please refer to the press releases on its applications of October 2020 and July 2021 and the final decision in the STRABAG case (cf. AFCA’s press release of 21 October 2021).
Fines for cartels
The Austrian Federal Cartel Act prohibits any behaviour that prevents or distorts competition. This covers price fixing agreements or the division of markets or territories. At the AFCA’s request, the Cartel Court may impose fines of up to 10% of a company’s overall annual turnover generated in the preceding business year if that company is found to have breached competition law. Fines are assessed on the basis of the gravity and duration of the breach, the degree of fault, and the economic strength and cooperation of the company concerned.