On 5 September 2023, the AFCA had applied to the Cartel Court for the imposition of a EUR 9.8 million fine on Granit Holding GmbH, the construction firm Granit Gesellschaft m.b.H. and Klöcher Baugesellschaft m.b.H. (hereinafter referred to jointly as “Granit Group”; see press release of 11 September 2023).
On 15 November 2023, the Cartel Court imposed a fine of EUR 9.8 million on the Granit Group, as requested. The Group was found to have committed a single and continuous infringement during the period from at least July 2002 until October 2017, with the infringement taking the form of illegal price fixing, market divisions and the exchange of information with competitors in relation to public and private tenders in the sector of building construction and civil engineering in Austria. The decision is final.
Granit cooperated with the AFCA outside the leniency programme to fully clarify the facts of the case, acknowledging the infringement for use in proceedings before the Cartel Court.
Background
The uncovered cartel relates to the economic sector of construction, with a focus on road building projects.
The infringement covers the entire Austrian territory, albeit to varying degrees depending on the company involved. Both public and private clients were affected by these practices. A large number of construction projects were impacted, which is why the AFCA’s investigations are still ongoing. Some of the proceedings have been finally concluded (see, for example, the press release of 3 October 2023 relating to Swietelsky).
The companies involved in the infringement engaged in concerted action in order to help each other to win construction contracts, thereby securing market shares and utilising their capacities accordingly, among other things. 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 behaviour when submitting bids – and in some cases formed anti-competitive working groups and bidding consortia.
The involved companies also agreed on which bidder should win the contract, the price to be offered and the submission of bogus offers, as well as arranging that certain competitors would not submit any bid at all.
FAQ Construction cartel update December 2023
For further information and the latest developments regarding the construction cartel, please refer to our FAQ Construction cartel update December 2023.
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 an entity’s total turnover generated in the preceding business year if that entity is found to have breached the rules banning cartels. Fines are determined 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.