Three enterprises from Silesia will jointly pay over PLN 900 thousand for rigging their bids in a tender for the delivery and assembly of the equipment in the buildings on the border crossing in Dorohusk, ruled the President of UOKiK

The basis for UOKiK operations was a request submitted by the Parexbud Multitrade Company. It accused three enterprises - Impex Trade, „Fornit” Furniture Factory and L&L - of concluding an illegal agreement while submitting bids in the tender. The enterprises bidded for a public procurement contract for the delivery and assembly of the equipment of the buildings on the border crossing in Dorohusk. The irregularities were confirmed by the antitrust proceedings launched in July 2005 by UOKiK.

Institutions having public funds at their disposal are obliged to organise tenders if the procurement exceeds EUR 14 thousand. Thsi way they can choose the best bid, which most often means the cheapest one.

Examining the case, the President of UOKiK found that three bidders concluded an illegal agreement with each other, which affected the course and the result of the tender. The most important result of the collusion was the fact that it was the company chosen by the members of the cartel - “Fornit” Furniture Factory - which won the bid and the bidders not participating in the collusion were excluded from the tender.

The proceedings showed that the participants of the collusion had agreed the conditions of their bids - including the prices. Moreover, they agreed to undertake common actions consisting in, i.a., a deliberate failure to remove formal defects in the submitted documents. During the antitrust proceedings UOKiK also found out that the three enterprises had had mutual business relations and had exchanged information on regular basis.

Price collusion is considered one of the most serious infringements of the ban on competition restricting practices. Participating in a collusion carries severe financial sanctions reaching up to 10% of the company’s previous year revenue. In the case of public procurement, collusions can additionally cause unfavourable distribution of public property and potentially causing the loss of the whole society. Therefore, each tender collusion is forbidden irrespective of the market share of the entities taking part in it.

Establishing the amount of the fines the President of UOKiK took into consideration both the income of the enterprises, as well as the extent to which the regulations had been violated. That is why, the fines were diversified:

Impex Trade - PLN 108 292;
Fornit Furniture Factory - PLN 508 514;
L&L - PLN 326 893.

It is worth mentioning that including tender collusion regulations in the provisions of an antitrust act is not a common practice in other European legislations and the Polish act is unique in this respect.

The decision is not binding yet. All the enterprises have lodged appeals to the Court of Competition and Consumer Protection.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. (+ 48 22) 827 28 92, 55 60 106, 55 60 314
faks (+48 22) 826 11 86
E-mail: mcieloch@uokik.gov.pl

UOKiK Branch Office in Katowice
ul. Powstańców 41a, 40-024 Katowice
Tel. (+48 32) 255 26 47, 256 46 96, 255 44 04
faks (+48 32) 256 37 64
E-mail: katowice@uokik.gov.pl