Competition and Antitrust News: Serbia

Serbian Commission Fines another Bid Rigging Cartel

The Serbian Competition Commission (the “Commission“) recently fined four undertakings for bid rigging in the public procurement for the maintenance of train wagons. The contracting authority, the “Nikola Tesla” power plant, which represents the largest electricity-producing complex in Serbia, informed the Commission about possible collusion in public procurement for repair services for the train wagons it uses in coal transportation.

Following this tip-off, the Commission initiated an official investigation, including dawn raids at the premises of bidders. Inter alia, the Commission looked at historical tenders and price fluctuations, as well as deviations and inconsistencies in the bidders’ own offers. However, the crowning evidence came from the notes from the meeting between the bidders, whereby they seemed to have clearly allocated the lots and pricing, correlating to the results of the public procurement procedure.

The representatives of the bidders made the notes prior to the 18th of January 2016, when the bids were opened. Further questioning of the representatives and employees of the bidders determined that the bidders actually met regularly to discuss the market conditions, further developments in the industry etc. and used such meetings to divide up the tender among themselves, in a classic cartel. The Commission imposed a fine in the amount of 2% of the total annual revenue generated for each undertaking in the public procurement procedure (including MIP RŠV, Inter-mehanika, Tatravagonka bratstvo and Šinvoz).

However, the Commission refrained from imposing a ban on participating in tenders, as it considered that this would lead to a temporary market exit for almost half of the market players, with three other market players currently undergoing bankruptcy.