Cartel Damage Claims

CASES

Cases Under Investigation

Finnish HVAC Pipelines Cartel

Finland · 2022

The Finnish Competition and Consumer Authority found that six manufacturers and wholesalers of plastic infrastructure pipelines coordinated for more than six years to raise prices. It has proposed fines of around €44 million.

On 8 September 2022, the Finnish Competition and Consumer Authority (KKV) found that the three largest Finnish wholesalers and the three largest manufacturers of plastic infrastructure pipeline products for heating, ventilation and air-conditioning (HVAC) had taken part in prohibited coordination from 2009 to 2016. These pipelines are used in construction, electrical and water supply work, including pipes, runoff water, sewage and drainage systems, and cable protection, typically in major construction projects.

The coordination aimed to raise prices by restricting competition at wholesale level, and it was based on reciprocity. The manufacturers generally refrained from selling directly to customers and directed sales to the wholesalers, even though customers in large projects wanted to buy directly at the lower prices that direct purchase usually offers. In return, the wholesalers refrained from buying significant quantities from competing manufacturers outside the arrangement.

CDC is following the proceedings closely. Companies that bought plastic HVAC infrastructure pipelines in Finland between 2009 and 2016, directly or through wholesalers, may be entitled to compensation for the overcharges they paid. CDC can assess potential claims and enforce them on a bundled basis, at no cost or risk to the affected companies.

The KKV has proposed that the Market Court impose total fines of approximately €44 million on the six companies. The participants held around 70% of the market, both in production and in sales. With the market valued at around €156 million in 2016, and assuming a stable market size over the cartel period, the volume of commerce affected can be estimated at around €936 million.

Dutch Cloud Services Market Study

Netherlands · 2022

The Netherlands Authority for Consumers and Markets (ACM) identified significant barriers that make it hard for users to switch cloud providers. The ACM warns that this lock-in risks higher prices, lower quality and less innovation.

On 5 September 2022, the Netherlands Authority for Consumers and Markets (ACM) published a market study on potential anti-competitive practices in the Dutch and European market for cloud services. Cloud services are IT services offered over the internet: instead of buying hardware and software, users pay for their actual use of services running on a provider’s infrastructure. They are usually grouped into Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).

The ACM found that switching providers is difficult because of three kinds of barrier. Some are technical. Some are organisational, because data cannot always be transferred easily between providers. Others are financial, because cloud providers charge high fees for data transfers.

CDC is monitoring developments in the cloud services market. Should the competition concerns identified by the ACM lead to infringement findings, businesses that have used cloud services may be entitled to compensation. CDC can assess potential claims on their behalf.

According to the ACM, these switching barriers increase market consolidation and lock users into their chosen provider for long periods. In an increasingly saturated market, this creates risks of less innovation, lower quality and higher prices. The development of the cloud market also affects competition across the wider internet ecosystem, where the cloud is set to play an increasingly important role.

Spanish Construction Bid-Rigging Cartel

Spain · 2022

The CNMC fined Spain’s six largest construction companies €203.6 million for rigging public infrastructure tenders over 25 years. Public administrations are entitled to claim damages before national courts.

On 7 July 2022, Spain’s National Markets and Competition Commission (CNMC) fined the country’s six main construction companies a total of €203.6 million for manipulating public infrastructure tenders between 1992 and 2017.

Throughout that period, the companies, referred to in the decision as the “G7”, met every week to analyse public works tenders published on state procurement platforms. They agreed which tenders they would share part or all of the work for in their technical bids, and no member could depart from the agreement without the others’ knowledge and approval. They also exchanged sensitive commercial information, such as whether they intended to bid and their plans for temporary joint ventures. A seventh member, Lantania, was not an addressee of the proceedings and was not fined. The group was dissolved in 2017, and the participants’ own records expressly referred to the anti-competitive nature of the agreements.

CDC is following the case closely. The main injured parties identified in the decision are public administrations, including the Ministry of Public Works and its dependent bodies and related entities. They are entitled to claim damages before the national courts of EU member states, and CDC can support affected entities in assessing and enforcing their claims.

On the day the decision was published, four of the six fined companies (Ferrovial, Acciona, Sacyr and ACS) announced that they would appeal. The infringement falls under both Spanish and EU competition law. It affected the market for public works contracts for infrastructure and public buildings and, to a lesser extent, residential buildings.

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