The Italian Competition Authority opens an antitrust investigation into a bid-rigging practice in the market for facility management

Anti-competitive conducts performed in connection of public procurement contracts are more and more attracting the attention of the Italian Competition Authority (ICA). In the case I808, Gara Consip FM4-Facility management (http://www.agcm.it/component/joomdoc/allegati-news/I808_avvio%20istr.pdf/download.html ),  the ICA opened an Article 101 TFEU investigation against 7 suppliers of facility management services. These were Consorzio Nazionale Servizi Società cooperative (CNS), Dussmann Service Srl (DS), Engie Servizi Spa (ES), Manitalidea Spa (Manitalidea), Manuntecoop Facility Management Spa (MFM), Romeo Gestioni Spa (RG) and STI Spa (STI).
In March 2014, Consip, the central purchasing body of the Italian public administration, called for a competitive tender procedure for the selection of the suppliers of facility management services for the immovable properties used by public entities, universities and research centres (the tender Consip FM4). The contract to be awarded was divided into 18 regional lots. The tender procedure is still pending. CNS withdrew its bid following the ICA decision that established that CNS had infringed competition by implementing a price-fixing and market sharing arrangements in connection to another tender procedure organized by Consip (School Cleaning Service, Michele Giannino ‘Collusion in Public Contracts Procurement: Suppliers of School Cleaning Services Fined for Bid Rigging (Italy)’, https://doi.org/10.1093/jeclap/lpw061). Incidentally, also MFM was found by the ICA to have infringed competition in that case.
The ICA started its investigation in Gara Consip FM4-Facility management, following the receipt of the additional pieces of information it had asked to Consip. To establish whether the conducts of the parties violated competition law, the ICA applied the methodology it created in previous cases concerning anti-competitive arrangements related to public procurement contracts. This methodology consists of the examination of endogenous and exogenous factors.
First, the ICA spotted a number of red flags in the bidding strategies of the parties. Though MFM, CNS, Manital and RG made a bid for all 18 lots, their bids overlapped only on two lots. And in this case the offer made by one of the bidder quoted a higher price than made by the other bidder. The bids made by the parties substantially reflected the contracts previously awarded to them. ES and DS were also engaged in allocation strategies. MFM, CNS, Manital and RG made clearly less aggressive offers for the lots for which ES and DS made the better temporary bids.
Second, there were many structural links between the parties. Many of the parties formed group of undertakings to jointly bid for public contracts and were also members of professional associations. Third, the above bidding strategies of the parties could not be explained but for a collusion strategy shared by all of them.
Therefore, the ICA reached the conclusion that the parties might have put in place a market sharing arrangements in relation to the tender Consip FM4. In addition, the ICA feared that the parties might have implemented similar practices concerning other tender procedures organized by Consip as found in the School Cleaning Service case.  

  

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