VILNIUS REGIONAL ADMINISTRATIVE COURT: JOINT BIDDING BY CONSTRUCTION COMPANIES RESTRICTED COMPETITION

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Vilnius Regional Administrative Court (the Court) upheld Competition Council‘s decision according to which two Lithuanian construction companies Panevėžio statybos trestas (PST) and Irdaiva  were fined for anti-competitive agreement.

The Court confirmed the findings that   in 2013–2015 the two companies breached the Law on Competition when they presented joined bids in 24 public tenders even though they both were capable to bid separately.

The Court noted that the companies entered into bidding consortia to win as many contracts as possible instead of exerting competitive pressure on each other. Such conduct restricted competition. The joint bidding agreements stipulated that in case of success the companies would share both, the workload and the income. By bidding jointly in a systematic manner the companies restricted competition in terms of both services offered and bid price.

Due to such joint-bidding the purchasing body was deprived of a possibility to choose from a higher number of strong competitors and to  benefit from better prices.

The Court highlighted that joint-bidding allows companies that cannot submit their tenders individually, to pool resources and increase competition. Yet, this does not mean that undertakings, which are capable of participating in the bidding process independently, can use joint-bidding as a means to restrict competition.

The Court announced that parties to the anti-competitive agreement committed a serious breach of competition law and upheld the fines imposed by the Council: PST – EUR 8 513 500, Irdaiva – EUR 3 685 900. According to the Court, the fines are proportionate to the type, duration and gravity of the infringement.

The decision of the Court can be appealed within one month after publication.