Cartels: road-salt companies "busted", fined 400 million HUF
Budapest, 1 February 2024 - The Hungarian Competition Authority (GVH) has closed another major public procurement cartel. The GVH found that between 2011 and 2014, seven major road salt distributors in Hungary engaged in anti-competitive collusion and collusion in seven tenders, most of which were public procurement tenders. The national competition authority imposed fines totalling around HUF 400 million on six companies, four of which admitted the infringement. Restrictions of competition in the context of public procurement procedures are considered to be the most serious competition law infringements and the GVH therefore gives priority to the elimination of public procurement cartels.
Just four months ago, at the beginning of October 2023, the GVH announced that a large number of road painting and road signage companies had divided the domestic market between themselves between 2012 and 2014. The national competition authority imposed fines of around 300 million HUF on 17 companies for a series of collusive practices covering the whole country, with some of those responsible also facing criminal sanctions.
The Competition Authority has now closed another similar cartel case. The national competition authority opened an investigation in 2014 after it found that major road salt distributors in Hungary had colluded on the prices to be submitted in public tenders for the purchase of anti-slip materials and divided the tenders among themselves. The competition monitoring procedure showed that the companies concerned agreed on their bid prices, the winning bidder and the allocation of some tenders between them in seven tenders, mostly public tenders, between 2011 and 2014. These included the procurement of Magyar Közút Zrt., Fővárosi Közterület-fenntartó Zrt. and tenders in Székesfehérvár and Gödöllő. In two cases, the illegal negotiations were conducted through intermediaries.
The GVH was forced to suspend the complex cartel proceedings investigating a significant number of companies and a large number of tenders, as the collusion under investigation not only entailed competition authority consequences, but also criminal proceedings were pending in relation to certain public procurement contracts. The GVH waited for a total of around 3.5 years for the final conclusion of the criminal proceedings, which also necessitated a reassessment of the available evidence. In several of the tenders under investigation, the Metropolitan Court of Budapest also found in its final judgment that a cartel offence had been committed.
In its assessment of the infringements committed, the Competition Council of the GVH considered as a particularly aggravating circumstance that they were aimed at allocating procurement procedures involving public funds and that the companies' senior officials were also involved. However, the competition authority took into account the cooperation of some of the participants as a mitigating circumstance, as four of the six undertakings fully admitted the infringement, waived their right to appeal and undertook to implement a compliance programme, in the framework of a so-called settlement procedure.
The Competition Council of the GVH finally imposed fines of HUF 139 million on MAGYAR PLASTIROUTE Kft, HUF 112.4 million on SOLINWEST 2000 Kft, HUF 74.4 million on SZABOLCS-MAG 98 Kft, HUF 42 million on "TRANSIT-SPEED" Kft, HUF 24 million on Kelet-Trans 2000 Kft and HUF 8 million on Agrochimtranspack Kft, i.e. a total of HUF 399.8 million.
The case registration number: VJ/76/2014.
Press release was translated automated.
