In 2013, the Romanian Competition Council finalised five investigations concerning bid-rigging infringements (amounting to almost a quarter of the authority's investigations on competition law infringements), of which one led to fines of EUR 2.8 million and the other four were closed for lack of evidence. Last year, the competition authority also launched two new investigations on possible bid-rigging infringements. The average duration for investigation of this type of infringement is approximately two years.
In the recent years, the Competition Council has
focused a significant part of its resources to the fight against
bid-rigging and also for its prevention.
The illegal practice of bid-rigging exposes the concerned
undertakings to fines of up to 10% of their total annual turnover;
in addition, the involved individuals (such as managers, legal
representatives of the company or any other individuals that hold
management positions) may face criminal charges (the felony
of misappropriation of public tenders
provided for in the Criminal Code is sanctioned with up to
five years of jail-time). Moreover, unlike the other competition
law infringements provided for in Article 5 (correspondent of
Article 101 TFEU) of the Competition Law no. 21/1996, in Romania,
the undertakings involved a bid-rigging infringement may not apply
for leniency and the involved individuals cannot seek immunity from
criminal liability.
Bid-rigging is considered a serious per se
infringement, so a participating undertaking can be sanctioned even
if it was not declared the tender's designated winner.
This infringement is founded on secret understandings
between competing undertakings taking part in tender procedures
with the aim of raising the prices and/or lowering the quality of
the products/services that are acquired through the tender. Certain
methods are practiced in order to commit fraud in tenders:
cover bidding - agreeing to submit a bid that is
higher than the bid of the designated winner or which is known to
be too high to be accepted; bid suppression
– participants agree to refrain from bidding or to
withdraw submitted bids; bid rotation –
participants agree to take turns in winning in a series of
tenders; market allocation –
participants agree not to participate for certain clients or for
certain geographic areas, or combinations of such. Undertakings may
be sanctioned for bid-rigging irrespective of their form of
participation, individually or as part of an association.
Certain economic sectors are prone to such
anti-competitive agreements due to such factors as few competitors
on market, high entry barriers, constant demand/little or no market
uncertainty, repetitive bidding, identical or similar
products/services, etc. In recent years, Romania's competition
authority has been very active in the bid-rigging segment and has
sanctioned important bid-rigging infringements such as the
maintenance services for gas networks tender,
road marking services tender and the
ammunition tender.
The Competition Council's investigations may be
launched ex officio (even as a result of a
sector inquiry), following a complaint from a participant who
believes that the tender was rigged, or even a complaint from the
entity which organised the tender. In order to detect rigged bids,
the competition authority cooperates with other public authorities
and, for this purpose, founded the Bid-Rigging Module (MLT) in
2010. Under this structure, the Competition Council's experts
cooperate and exchange
information with representatives of the National Authority for
Regulation and Monitoring of Public Acquisitions, the Public
Acquisitions Verification and Coordination Division,
the National Council for Solving Complaints, the Prime
Minister's Control Body, the Romanian Court of Accounts, the
Prosecutor's Office attached to the High Court of Cassation and
Justice (Romanian Supreme Court), and the Antifraud Division.
Considering that direct evidence for this type of
competition law infringement is almost always nonexistent
(participants in a bid-rigging scenario will almost certainly not
conclude a written agreement), the competition authority relies
heavily on circumstantial evidence. For this purpose, the
Competition Council uses the dawn raid as its primary weapon of
searching for evidence and looks primarily for communications
(especially emails) between the suspected participants to the
infringements, any hand-written notes by the undertakings'
representatives at the tenders, files and documents drafted for the
purpose of tenders, etc. As a fact, in one previous case, the
competition authority argued that certain competing companies
colluded for a tender because the documents they (individually)
submitted for the tender had several identical typing and
formatting errors, something the Competition Council did not regard
as coincidental.
Possible leads for identifying anticompetitive
behaviour may exist with regard to prices (or other commercial
conditions) offered during the tender, any communications from and
between the competing companies with regard to the tender,
companies' behaviour in previous (similar) tenders, the fact
that two or more participants were represented for a tender by the
same individual, etc. Another sign may be the fact that subsequent
to a tender, the designated winner transfers/sub-contracts the
agreement (or parts of it), which represented the tender's
object, to other participating companies (this practice was
observed by the Competition Council in the road marking
services tender).
In order to prevent competition law infringements with
regard to tenders, firms are well-advised to avoid any
communications with competing companies with regard to upcoming
tenders in order to reduce the risk of exchanging sensitive
information. Also, firms should be aware of communications made
prior to tenders that might contain or address sensitive
information (such as prices, commercial conditions, products /
services to be offered) – these communications might also be
caught by the competition authority's antenna.
The Competition Council can also base its case on
evidence gathered from other participants. The fact that the
authority did not find evidence at one of the suspected
participants does not necessarily exclude that undertaking from
being sanctioned. Also, the Competition Council may investigate
possible infringements concerning both public tenders (public
acquisitions) and private tenders.
Identifying bid-rigging remains a priority on the
Competition Council's fight against competition law
infringements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.