Railway Design Cartel Revealed thanks to Leniency Programme, the Office Imposed Fine on SUDOP Praha
By its first-instance decision, the Office for the Protection of Competition punished bid rigging agreement on projecting high-speed rails concluded by SUDOP PRAHA a. s. (hereinafter referred to as “Sudop”) and Výzkumný Ústav Železniční, a. s. (railway research centre – hereinafter referred to as “VUZ”).
The Office imposed fine amounting to CZK 9,302,000 on Sudop company. VUZ informed the Office on the existence of the cartel agreement within the so-called leniency programme and thus the fine on VUZ was not imposed. The decision has already come into force.
Petr Mlsna, the Chairman of the Office, commented on the decision as follows: “High-speed rails´ projecting is necessary for modernization of the Czech transport infrastructure and collusion of designers, which makes the public contract more expensive, is quite unacceptable. We will continue monitoring this sector carefully.”
The anticompetitive conduct of the above-mentioned undertakings implemented between November 2014 and May 2015 consisted in coordination of bids within tender concerning preparation of technical and operational study of high-speed rails called Technical and Operational Study – Technical Solutions VRT awarded by Správa železnic (state organisation dealing with administration of rails). Coordinated bids with the aim to win the above-mentioned tender were submitted by the association called “Společnost SP + Acri + MTP Technická řešení VRT.” Sudop was the leading member of the association. The above-mentioned companies distorted the competition within the mentioned tender infringing the Competition Act.
The Office dealt with the case on the basis of the notification made by VUZ, which informed the Office, within the so-called leniency programme, on the existence and details of the cartel agreement. VUZ was the member of the cartel agreement and it asked for not imposing the fine. As VUZ met all the legal requirements, the Office granted VUZ the immunity in the decision. Leniency programme is the tool crucial for investigation of anticompetitive agreements. It motivates the members of the cartel agreement to notify the competition authority of its existence in exchange for not imposing or reducing the fine.
Sudop made use of the so-called settlement procedure, within which it admitted committing the illegal conduct. Consequently, its fine was reduced by 20% and it did not file an appeal against the decision.