Engadin: Violations of the Cartel Act confirmed

In its decision of 26 March 2018 ("Hoch- und Tiefbauleistungen Engadin I"), the Competition Commission (COMCO) imposed sanctions on construction undertakings operating in the Lower Engadin for various violations of the Cartel Act. The undertakings were particularly accused of having been part of unlawful overall agreements – both in preparatory meetings as well as in a bilateral context. Accordingly, the undertakings were supposed to have colluded for years (at least partially) on pricing, territories and business partners in an institutionalised framework.

In total, three undertakings each filed an appeal with the Federal Administrative Court (FAC) against the COMCO decision. The undertakings in question are the Foffa Conrad Group, Lazzarini AG and Resgia Koch SA (initially Koch AG Ramosch).

Convincing proof of overall agreements
The FAC has conducted a comprehensive review of the facts. It concludes in particular that there existed – since 1997 at the latest – an (overall) consensus between construction undertakings in the Lower Engadin on the cross-project designation of successful tenderers to be and respective tender prices in the framework of preparatory meetings. Namely the appellant undertakings were participating. Moreover, the FAC confirms that – at the latest starting from 2008 and until October 2012 – there existed a bilateral (overall) consensus between undertakings of the Foffa Conrad Group and Lazzarini AG to coordinate market behaviour across projects.

In the cases at hand, these consensual practices constitute unlawful (overall) agreements aimed at restricting competition. They qualify as serious in the sense of “by object” restrictions and are on principle directly sanctionable violations under the Cartel Act. The Court further upholds COMCO’s decision with respect to the liability of subsequent undertaking holders.

Sanction amounts
The sanctions imposed amount to CHF 2,463,674 for the Foffa Conrad Group, CHF 2,031,676 for Lazzarini AG and CHF 184,510 for Resgia Koch SA. The FAC reduces the sanction amounts in varying degrees vis-à-vis the COMCO decision. In the case of the Foffa Conrad Group, the FAC gives added weight to the fact that the Foffa Conrad Group submitted a voluntary report and thus contributed to uncovering and eliminating the competitive restraints. Moreover, a settlement payment to the Canton of Graubünden (made after the COMCO decision) may slightly be deducted from the sanction. In the case of Lazzarini AG, account is taken – albeit to a significantly lesser extent – of the fact that the company disclosed the behavioural pattern in the context of the bilateral overall agreement. Lastly, in the case of Resgia Koch SA, the FAC takes into consideration that there is insufficient evidence for the undertakings’s participation in the preparatory meetings before 2006 as well as that violations in connection with various individual agreements prove marginally less severe.

These judgments may be appealed to the Federal Supreme Court.