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Association of undertakings has coordinated tenders illegally

30. april 2014

On 30 April 2014 the Danish Competition Council (DCC) ruled that Skive og Omegns Vognmandsforening, an association of undertakings, has restricted competition by coordinating tenders regarding winter road maintenance in the municipality of Skive Kommune. The DCC ordered the association to stop the infringement of section 6 of the Danish Competition Act. Furthermore, the association of undertakings must refrain from similar anti-competitive behavior in the future.

Skive og Omegns Vognmandsforening has approximately 40 members. The members are individual carriers offering transportation of goods, including winter road maintenance, ie. clearing of snow and salting. The carriers are situated in and around the municipality of Skive Kommune in Jutland, Denmark.

In 2010 Skive Kommune called for tenders regarding winter road maintenance of 11 individual routes for the period 1 October 2010 to 30 April 2014. The association of undertakings made offers on all 11 routes and won 9 routes. The association of undertakings hereafter allocated the routes between 10 of their members. The allocation was done by lot. The individual routes are mainly handled by two carriers.

DCC found that by making a coordinated offer and allocating the routes between independent carriers, who are members of the association, Skive og Omegns Vognmandsforening has restricted the competition that would have existed between the individual members. Thus the association’s coordinated tenders removed any incentive for the individual members of the association to compete by making their own offers. Consequently there is a substantial risk that the cost of winter road maintenance was in fact too high, harming Skive Kommune and in the end the taxpayers.

The contract between Skive Kommune and Skive og Omegns Vognmandsforening regarding the winter road maintenance contains an option to extend the existing contract until 30 April 2016. The DCC’s decision means that the contract cannot be extended.

For further information please contact Head of Division, Jacob Schaumburg-Müller, T: + 45 4171 5118.