COMPETITORS AGREED WHO WILL WIN AUCTION BY IGNALINA NUCLEAR POWER PLANT

The Competition Council found that UAB Norvesta and the German company Sypra concluded a cartel agreement while participating in the radioactive scrap metal auction conducted by Ignalina nuclear power plant, and thus were fined EUR 27,500 and EUR 27,100 respectively.

The Council opened the investigation after receiving information from the Special Investigation Service of the Republic of Lithuania and found that both firms coordinated their actions by agreeing in advance who will win the auction that took place in 2014.

The Council Member Jolanta Ivanauskienė said that the auction participants only imitated competition: representatives of both companies agreed in advance that Sypra will submit a winning bid. Besides, Sypra helped Norvesta to make an agreement with the company engaged in radioactive waste recycling, which was one of the necessary conditions of the participation in the auction.

According to J. Ivanauskienė, due to the cartel concluded between the companies, Ignalina nuclear power plant could not get the best offer in terms of price and ensure that state budget was used efficiently. Sypra, which ultimately won the auction, submitted only a starting bid which exceeded EUR 1.5 million. If the companies had submitted separate bids, Ignalina nuclear power plant could have sold the scrap metal at a higher price.

“Since the price of products or services is one of the main aspects of competition, price-fixing cartels are considered one of the most serious competition law infringements. Business representatives have to make individual decisions not just about the sales price, but also about the purchase price“, – said the Council Member.

The fines imposed on Norvesta and Sypra for the infringement of the Law on Competition amounted to EUR 27,500 and EUR 27,100 respectively.