Bundeskartellamt and Public Prosecutors Jointly Focusing on the Prosecution of Bid Rigging
Client Alert | 1 min read | 02.10.12
On 10 February, 2012 the Bundeskartellamt announced that it will strengthen its cooperation with the competition authorities of the Länder and public prosecutors in the framework of the prosecution of bid rigging. The announcement comes at the end of a week that already saw a set of meetings between stakeholders of these parties, and could herald a more rigorous institutionalized approach to the prosecution of conduct that is condemned under both German competition and criminal law.
Background
Under German law, bid rigging is deemed anti-competitive and can lead to the imposition of administrative sanctions (including fines) on the undertakings involved. It is also a criminal offense that can lead to prosecution of the individuals acting on behalf of the undertakings involved, with penalties of up to five years of imprisonment.
Due to the number of institutions implicated (Bundeskartellamt and competition authorities of the Länder with regard to the competition law aspects, various departments of public prosecution with regard to the criminal law aspects), the prosecution of bid rigging has been somewhat piecemeal in the past. The Bundeskartellamt's current initiative brings together a wide variety of actors to discuss the legal and practical aspects of coordination in the course of investigations, for example joint searches. The participants also discussed the appointment of single points of contact and specialized units within their respective organizations in order to facilitate the joint prosecution of bid rigging.
Whilst the criminal sanctions which have been available since 1997 have hardly been used in the past, bid rigging has attracted closer scrutiny from the Bundeskartellamt recently. The initiative to enhance the cooperation among the various enforcement agencies will bring more government scrutiny to a behavior that usually attracts public attention as it harms public institutions and thus the public finances. Moreover, bid riggers face mounting pressure not only from the enforcement authorities, but also from the public institutions affected which increasingly resort to actions for damages in order to obtain compensation for the overcharges incurred as a result of bid rigging.
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