Prohibited agreements

Strabag must pay a fine of almost 2.8 million euros

The Strabag headquarters in Vienna

(Bild: AFP/Alexander Klein)

Austria's largest construction group, Strabag, has been ordered to pay a cartel fine in Germany. The German Federal Cartel Office imposed a fine of 2.79 million euros on Strabag AG, based in the Rhine metropolis, for illegal collusion in the tendering process for a construction project in Cologne.

 

The agreements were made in connection with the renovation of the Zoobrücke bridge, the competition authority announced on Wednesday. Employees of Strabag AG and Kemna Bau Andreae (KEMNA), based in Pinneberg near Hamburg, were involved.

Protective bids submitted in tenders
The companies had agreed that KEMNA would submit a protective bid in the tender in order to enable the contract to be awarded to a bidding consortium with the participation of Strabag. KEMNA is said to have received compensation payments for this.

Cartel office suspects annual damage in the billions
According to the German Federal Cartel Office, this is a so-called bid-rigging agreement. According to Andreas Mundt, President of the Federal Cartel Office, such illegal cartel agreements mean that tendering procedures do not lead to quality and price competition as intended. "According to estimates, bid-rigging in public-sector construction projects in Germany alone causes damage amounting to several billion euros per year."

Anonymous tip-off led to proceedings
The proceedings against Strabag AG were triggered by an anonymous tip-off to the Federal Cartel Office, the Bonn authority went on to explain. The proceedings against KEMNA were discontinued under the leniency program because the company had made it possible to prove the crime by providing evidence. During the proceedings, Strabag AG also cooperated with the Cartel Office and ultimately agreed to the termination of the proceedings. The fine is legally binding.

According to the Cartel Office, there was a raid in September 2021 in the case, which dates back to the beginning of 2017. In December of the same year, Strabag AG became a wholly-owned subsidiary of the Viennese construction group Strabag SE, which has held a majority stake in the traditional Cologne-based group since 1997.