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NCC and Veidekke face massive collusion fines

18 Oct 11 The Norwegian Competition Authority (NCA) has notifed NCC and Veidekke that they may be fined a total of NOK435m (£49.3m) for violating competition law in connection with asphalting work.

NCA's Christine Meyer
NCA's Christine Meyer

NCA is assessing whether to impose an administrative fine for violation of the Competition Act. They would be the largest fines imposed in a Norwegian competition case.

“We take very seriously the extensive illegal cooperation we have discovered,” said the director general for competition Christine Meyer. Veidekke and NCC divided the market for public contracts for asphalt in Middle Norway between them, she said. “They did the same with contracts for the City of Trondheim. In addition, they shared competitively sensitive information in connection with a bid in Møre og Romsdal in 2006.”

NCC faces a fine of NOK165m (£18.7m). However, NCA has said that Veidekke may be exempted from its fine of NOK270m (£30.6m). Veidekke said that NCA has stated that it will be exempted from the fine, provided that it continues to cooperate fully and that no information becomes available indicating that Veidekke has given the authority misleading or incorrect information.

NCC said that its considers that the amount of damages is excessive, but admits to a number of the circumstances.

NCA said that it has uncovered extensive collusion between Veidekke and NCC in connection with asphalt paving in the counties of Nord-Trøndelag and Sør-Trøndelag, the area surrounding the city of Trondheim. Through close dialogue before competitive bidding, the two companies divided large public contracts between themselves, according to NCA. The collusion occurred during 2005-2008.

NCC said that the breaches were committed by a single former employee. “It is regrettable that a former employee has premeditatedly acted completely in contravention of the company’s values and rules,” said business area president of NCC Roads Göran Landgren. “Such actions risk seriously damaging the company and the entire industry.”

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Veidekke CEO Terje R Venold said: "We consider breaches of competition law in our organisation as very serious. At the same time, we are pleased that the Competition Authority's decision shows that the breaches are not the result of a wanton company culture. With the exception of one incident, a single person is responsible for the breaches. We are disappointed that this could happen despite our substantial investment of resources over years in extensive ethics training and proper business conduct. We are pleased that the Competition Authority confirms in its decision that we have met cooperative requirements, and we appreciate the professional and constructive cooperation we have had with the Authority since notifying them of the allegations.”

In addition, the Competition Authority has found one occasion where information was exchanged between Veidekke and NCC in the county of Møre og Romsdal in 2006. NCC said that it completely refutes NCA’s claims concerning illicit collusion in the Møre and Romsdal district.

NCA learned about the case when Veidekke sought leniency—exemption from a possible fine for infringement—in January 2010. On the basis of the information from Veidekke, NCA has carried out several searches and seizures and collected a large quantity of information, including testimony from people in the industry.

Because Veidekke informed the Competition Authority about the illegal cooperation and contributed to solving the case, the company may be exempted from the infringement fine.

The case is not finalized and NCA emphased that the assessments presented in the advance notice are preliminary. No final decision has been reached in the case.

According to the law on public administration, the companies have the opportunity to express their opinions before the authority makes the decision. The two companies have a deadline of 9 December to submit their comments.

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