Undercover Collusion: The Cartel Scandal Rocking Germany's Road Construction Industry
Unlawful Collaboration in Road Building: Federal Cartel Authority Levies Millions in Penalties - Millions in penalties levied by The Federal Cartel Office
Here's the lowdown on a troubling situation unfolding in the world of road construction. According to the Federal Cartel Office, some underhanded dealings went down between 2016 and 2019, with a whopping bunch of companies involved. It's all about fixing the bids—and not in a good way.
Andreas Mundt, head honcho at the Federal Cartel Office, spilled the tea: "Before each tender, they'd decide amongst themselves who'd win," he said. Shocker, right? Sometimes, other firms would step in with what they call 'cover bids,' which were none other than prearranged minimum amounts.
Mundt elaborated, explaining, "Effective competition is essential if we're to get goods and services economically and efficiently. But illegal cartels can mess things up big time." And they sure did! According to Mundt, illegal cartels can lead to some serious damage, and the sad part is, it's the ordinary folks who end up footing the bill.
In 2018 and 2019, four of the involved companies were playing hot potato with clients in the German states of Saxony, Thuringia, and Saxony-Anhalt. The Federal Cartel Office found that code language was often used to determine who'd participate in each tender and who'd submit which cover bid.
Fast forward to 2016 through 2019, and lo and behold, here come four other companies, making sweet deals together in Brandenburg and Saxony-Anhalt—and sometimes Mecklenburg-Vorpommern. One of these companies was no stranger to shady business practices, showing up in both incidents.
The tenders in question were simple road repair jobs or the supply of bitumen emulsion or gravel. Call it a small potatoes affair, with contract values usually hanging between 40,000 and 200,000 euros.
Wanting to clean house, the Federal Cartel Office teamed up with the Public Prosecutor's Office in Düsseldorf in 2019 and carried out a series of raids. One company managed to save face by cooperating under the leniency program.
It's important to note that details about the cartel agreements in these specific areas have been scant and require access to official sources or extensive legal databases for a more comprehensive understanding.
- Illegal cartel agreements
- Road construction
- Federal Cartel Office
- Andreas Mundt
- Saxony-Anhalt
- Saxony
- Thuringia
- Brandenburg
- Mecklenburg-Vorpommern
- The illegal cartel agreements uncovered by the Federal Cartel Office in the road construction industry involved several companies colluding to fix bids and manipulate tenders in regions like Saxony, Thuringia, Saxony-Anhalt, Brandenburg, and Mecklenburg-Vorpommern, resulting in inefficient business practices that ultimately cost the general public.
- Following the discovery of the cartel scandal, Andreas Mundt, head of the Federal Cartel Office, emphasized the importance of effective competition in the industry, stating that such illegal cartels hinder the economical and efficient provision of goods and services, leading to potential financial losses for the community.
- In the wake of the scandal, multiple companies found themselves at the center of crime-and-justice investigations, as they were implicated in industry-wide collusion to submit cover bids and manipulate tender processes for road repair jobs, supply of bitumen emulsion, or gravel across various German states, with contract values typically ranging between 40,000 and 200,000 euros.
