The Danish Eastern High Court upholds fines imposed in demolition cartel case

By senior intern Christoffer Mørkebjerg Kirkebække

Background

In the fall of 2015, a number of demolition companies had unannounced inspection visits. Following the preliminary investigations, the Danish Competition Council decided in April 2016 to report the case to the State Prosecutor for Serious Economic and International Crime, who then decided - based on, among other things, material seized during the inspection visits - to bring a charge against eight of the companies. CMP Nedrivning and seven competitors were charged with having engaged in illegal bid rigging activities. The illegal activities took place in connection with demolition assignments for both public and private customers, primarily in North Zealand and Copenhagen.

The Court of Hillerød concluded that CMP Nedrivning in 11 cases had engaged in illegal bid rigging in the period from September 2011 to October 2013. In all of the cases, CMP had forwarded to a competitor the bid quoted by CMP to a main contractor. The District Court held that it was a matter of illegal price lending. Against that background, CMP Nedrivning was fined DKK 5 million, and two senior employees were fined DKK 125,000 each. The District Court's decision was subsequently appealed to the Eastern High Court.

Judgment of the Eastern High Court

The Eastern High Court has now upheld the judgment issued by the District Court of Hillerød. The Eastern High Court has concluded that it was a matter of a concerted practice aimed at restricting competition in connection with the submission of bids, and that CMP Nedrivning had been aware of that. The Eastern High Court has upheld the level of fines set by the District Court.

Following the judgment against CMP Nedrivning, the aggregate fines imposed or accepted in the case total DKK 16.4 million, of which the personal fines amount to DKK 1.7 million.