News
Construction cartel ends in withdrawal of charges
Contractor Julius Nielsen & Søn has seen the charges brought against it for its participation in the complex of cases regarding the Greater Copenhagen building cartels withdrawn. The complex of cases is thus closed. In total, 25 companies and 21 senior executives have paid fines totalling DKK 31 million in the cases.
Director General of the Competition and Consumer Authority Jakob Hald says::
"I’m pleased that the cases of the Greater Copenhagen building cartels have now come to an end. The cartel members effectively invalidated competition by coordinating prices for construction projects, to the detriment of both public and private developers."
"Cartels represent a serious economic crime which today is punishable by both imprisonment and heavy fines. All companies must keep well away from cartels, but should a company find itself on the wrong side of the line, an application for leniency is the right way out of the cartel.”
The State Prosecutor for Serious Economic and International Crime (SEIC) has withdrawn charges against Julius Nielsen & Søn in the complex of cases on the Greater Copenhagen building cartels.
After the Competition and Consumer Authority’s unannounced inspection at the premises of, among others, Julius Nielsen & Søn in early 2010, the company decided to apply for leniency under section 23a of the Danish Competition Act.
In connection with the complex of cases, Julius Nielsen & Søn was charged with 20 counts of bid rigging. The company contributed to the exposure of several illegal practices by construction companies in the metropolitan area, and thus fulfilled the criteria for leniency.
With the withdrawal of the charges, the entire complex of cases is closed. In total, fines totalling DKK 31 million have been issued to 25 companies and 21 executives. One company has been acquitted. The largest fine in the complex of cases, DKK 10 million, was accepted for 12 counts of bid rigging.
The complex of cases regarding the Greater Copenhagen building cartels is one of the largest cartel cases in Danish history. The companies involved rigged prices for construction contracts to the tune of DKK 400 to 500 million.
FACTS: LENIENCY
• A cartel represents a serious economic crime. Competing companies agree to restrict competition among themselves.
• The agreements may have different characteristics, for example involving bid rigging, price coordination, sharing of markets or restriction of production.
• Cartels are highly detrimental to customers and to the general economy. Studies show that, on average, cartels overcharge by 10-50 percent.
• Companies can be punished with fines. Usually, the fine will not exceed 10 percent of the turnover of the group of which the company is a part.
• Individuals, including the company’s management and senior staff, are punishable by fines and imprisonment of up to six years.
• It is possible to avoid punishment. Among other things, this requires a company or a person to be the first cartel member to contact the authorities.
FACTS: LENIENCY
• Leniency makes it possible to completely avoid fines or imprisonment for participation in a cartel, if you are the first company or person to contact the authorities with information about the cartel and you satisfy a number of conditions, including cooperating with the authorities in the investigation of the case.
• Even if a company is not the first to contact the authorities, it is still possible to get reduced penalties, provided the company offers information which can help the investigation of a case.
• An application for leniency from a company automatically includes the company’s employees.