Tagged: bid rigging

The Kone Case and the Lifts Cartel – An Upward Effect on Prices and Effectiveness?

By Hans Vedder

On June 5 the Court has handed down the eagerly awaited judgment in the Kone case. This is one of the several cases that result from the Commission’s decision finding a cartel in the elevators and escalators sector. The decision concerned a bid rigging cartel involving four well-known firms (Kone, Schindler, Otis and ThyssenKrupp) active in the market for the production, installation and servicing of elevators and escalators. Bid rigging is a practice by which the participants in a tender procedure coordinate their bids in order to determine who wins the tender at what price. They will typically determine the cartel member intended to win and ensure that the other bidders put in a higher price. As most of these products are bought by professional buyers that tend to hang on to their purchasing records, civil damages claims resulted from the Commission’s finding that there was cartel. This means that the customers of the companies involved in the cartel seek to claim the supracompetitive part of the price they paid (the cartel mark-up). In keeping with the need for more damages claims fervently voiced by then Competition Commissioner Neelie Kroes, the Court has had to deal with quite a few cases on this issue already, but many more are to be expected. Kone deals with the question to what extent the cartelists are required to compensate the higher price charged not just by the members of the cartel, but also by other companies in the market (the umbrella effect). Continue reading

Risk of anti-competitive collusion after excessive level of transparency in public procurement debriefing?

In its Judgment of 4 October 2012 in case C‑629/11 P Evropaïki Dynamiki v Commission (ESP-ISEP), the Court of Justice has issued another interesting decision on what should be considered sufficient debriefing of disappointed bidders in public procurement procedures.

The Evropaïki Dynamiki (ESP-ISEP) Judgment has been issued on the basis of Article 100(2) of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1) (‘the Financial Regulation’). However, a ‘twin’ provision can be found in Article 41 of  Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114) (‘Directive 2004/18’). Consequently, the Judgment is of relevance in all areas of public procurement, and not only to that of the EU Institutions.

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