Illegal cooperation on school buildings in Oslo

The Norwegian Competition Authority imposes fines exceeding NOK 18 million (approximately EUR 2 million) on six undertakings in the electrical installation sector for illegally cooperating on a tender for school buildings in Oslo.

The cooperation took place in the spring of 2014, and the tender was for the maintenance and repair of electrical installations in schools managed by Undervisningsbygg Oslo KF, the city of Oslo’s company for managing school construction and maintenance.

– Five competitors agreed on identical prices and exchanged other competitively-sensitive information instead of competing to submit the best offer to Oslo Municipality, says Lars Sørgard, Director general of the Competition Authority.

The chain of electricians, El Proffen / EP Contracting, initiated and organized the cooperation between the five competing member companies in the tender competition. They jointly submitted bids to Undervisningsbygg. The undertakings did not try to conceal their cooperation from the procuring authority.  Undervisningsbygg reacted to the cooperation and contacted the Competition Authority.

– Chains must pay special attention to the competition law limits when they bring together many competing members in one forum, says Sørgard.

It is the Competition Authority’s assessment that the individual companies could have submitted independent bids and that as a consequence it was illegal to cooperate.

The Competition Authority will impose a fine on El Proffen AS / EP Contracting AS of NOK 2.5 million, Lysteknikk Elektroentreprenør AS a fine of NOK 4.5 million, Elektro Nettverk Service AS a fine of NOK 4.5 million, Arkel Asker and Bærum AS a fine of NOK 3.29 million, Hoel Elektro AS a fine of NOK 1.29 million, and Røa Elektriske AS a fine of NOK 2.45 million.

– Illegal cooperation between competitors is very harmful. It imposes large costs on society and makes buyers and consumers pay more for goods and services, says project manager Line Skorpa Nygaard.

The Competition Authority’s case handling:

• The Competition Authority secured evidence at El Proffen AS / EP Contracting AS, Lysteknikk Elektroentreprenør AS and Elektro Nettverk Service AS in unannounced inspections on 25 June 2014. During the visit, the Authority seized documents and electronically stored material.

• During the period June 2014 to March 2015, interviews were conducted with key persons in the six companies involved as well as in Undervisningsbygg.

• After securing the evidence, the extensive paper and data material was reviewed, systematized and analyzed.

• A statement of objections regarding fines imposed for unlawful cooperation was sent to the companies on 16 March 2016.

• The parties submitted their response to the statement of objections in May 2016.

• The Competition Authority issued a final decision in the case, imposing fines for violating the law, on 4 September 2017.

Portrettbilde av konkurransedirektør Lars Sørgard.
Lars Sørgard, konkurransedirektør.