Romania: The Competition Council Keeps An Eye On Bid-Rigging

In 2013, the Romanian Competition Council finalised five investigations concerning bid-rigging infringements (amounting to almost a quarter of the authority's investigations on competition law infringements), of which one led to fines of EUR 2.8 million and the other four were closed for lack of evidence. Last year, the competition authority also launched two new investigations on possible bid-rigging infringements. The average duration for investigation of this type of infringement is approximately two years.

In the recent years, the Competition Council has focused a significant part of its resources to the fight against bid-rigging and also for its prevention. 

The illegal practice of bid-rigging exposes the concerned undertakings to fines of up to 10% of their total annual turnover; in addition, the involved individuals (such as managers, legal representatives of the company or any other individuals that hold management positions) may face criminal charges (the felony of misappropriation of public tenders provided for in the Criminal Code is sanctioned with up to five years of jail-time). Moreover, unlike the other competition law infringements provided for in Article 5 (correspondent of Article 101 TFEU) of the Competition Law no. 21/1996, in Romania, the undertakings involved a bid-rigging infringement may not apply for leniency and the involved individuals cannot seek immunity from criminal liability. 

Bid-rigging is considered a serious per se infringement, so a participating undertaking can be sanctioned even if it was not declared the tender's designated winner.

This infringement is founded on secret understandings between competing undertakings taking part in tender procedures with the aim of raising the prices and/or lowering the quality of the products/services that are acquired through the tender. Certain methods are practiced in order to commit fraud in tenders: cover bidding - agreeing to submit a bid that is higher than the bid of the designated winner or which is known to be too high to be accepted; bid suppression – participants agree to refrain from bidding or to withdraw submitted bids; bid rotation – participants agree to take turns in winning in a series of tenders; market allocation – participants agree not to participate for certain clients or for certain geographic areas, or combinations of such. Undertakings may be sanctioned for bid-rigging irrespective of their form of participation, individually or as part of an association.

Certain economic sectors are prone to such anti-competitive agreements due to such factors as few competitors on market, high entry barriers, constant demand/little or no market uncertainty, repetitive bidding, identical or similar products/services, etc. In recent years, Romania's competition authority has been very active in the bid-rigging segment and has sanctioned important bid-rigging infringements such as the maintenance services for gas networks tender, road marking services tender and the ammunition tender.

The Competition Council's investigations may be launched ex officio (even as a result of a sector inquiry), following a complaint from a participant who believes that the tender was rigged, or even a complaint from the entity which organised the tender. In order to detect rigged bids, the competition authority cooperates with other public authorities and, for this purpose, founded the Bid-Rigging Module (MLT) in 2010. Under this structure, the Competition Council's experts cooperate and exchange information with representatives of the National Authority for Regulation and Monitoring of Public Acquisitions, the Public Acquisitions Verification and Coordination Division, the National Council for Solving Complaints, the Prime Minister's Control Body, the Romanian Court of Accounts, the Prosecutor's Office attached to the High Court of Cassation and Justice (Romanian Supreme Court), and the Antifraud Division.

Considering that direct evidence for this type of competition law infringement is almost always nonexistent (participants in a bid-rigging scenario will almost certainly not conclude a written agreement), the competition authority relies heavily on circumstantial evidence. For this purpose, the Competition Council uses the dawn raid as its primary weapon of searching for evidence and looks primarily for communications (especially emails) between the suspected participants to the infringements, any hand-written notes by the undertakings' representatives at the tenders, files and documents drafted for the purpose of tenders, etc. As a fact, in one previous case, the competition authority argued that certain competing companies colluded for a tender because the documents they (individually) submitted for the tender had several identical typing and formatting errors, something the Competition Council did not regard as coincidental.

Possible leads for identifying anticompetitive behaviour may exist with regard to prices (or other commercial conditions) offered during the tender, any communications from and between the competing companies with regard to the tender, companies' behaviour in previous (similar) tenders, the fact that two or more participants were represented for a tender by the same individual, etc. Another sign may be the fact that subsequent to a tender, the designated winner transfers/sub-contracts the agreement (or parts of it), which represented the tender's object, to other participating companies (this practice was observed by the Competition Council in the road marking services tender).

In order to prevent competition law infringements with regard to tenders, firms are well-advised to avoid any communications with competing companies with regard to upcoming tenders in order to reduce the risk of exchanging sensitive information. Also, firms should be aware of communications made prior to tenders that might contain or address sensitive information (such as prices, commercial conditions, products / services to be offered) – these communications might also be caught by the competition authority's antenna.

The Competition Council can also base its case on evidence gathered from other participants. The fact that the authority did not find evidence at one of the suspected participants does not necessarily exclude that undertaking from being sanctioned. Also, the Competition Council may investigate possible infringements concerning both public tenders (public acquisitions) and private tenders.

Identifying bid-rigging remains a priority on the Competition Council's fight against competition law infringements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions