When participating in tenders, companies must be knowledgeable of procurement law. Several recent cases in the Netherlands, however, have revealed that companies should not only be mindful of procurement law, but also well versed in the relevant aspects of competition law.
On 22 November 2017, the court of first instance in The Hague ruled in favour of the Dutch Authority for Consumers & Markets (ACM) in a case concerning a raid conducted by the ACM where the competition authority had copied both personal and professional information from the phones of the plaintiff's employees. In its judgement, the court held that the ACM took sufficient safeguards to protect the personal data on the devices and the privacy of the plaintiff’s employees.
Following the judgment, the ACM confirmed in a press release that the raid was part of an on-going cartel investigation into allegations of manipulation in public procurement in the Netherlands. This investigation is part of an effort by the ACM to clean up this EUR 136 billion market. The ACM had previously promised to focus attention on sectors with the following characteristics: limited number of participants and limited access for newcomers, high trust and contact between competitors, and sectors with similar products and services, and limited technical innovation.
Last year, the ACM won two cases on appeal involving price-fixing, anti-competitive information exchanges, and bid rigging. In the first case, a group of demolition companies engaged in cover pricing: coordinating prices to give the impression of effective competition while in reality only one company is submitting an effective bid. In the second case, two companies scheduled to merge set up a working group for procurement procedures and upcoming tenders. Ultimately, the companies did not merge and the ACM fined them for exchanging tender information.
Another high-profile case concerning public-transport tenders in the Dutch province of Limburg received national press attention when the ACM ruled that prominent railway operator Dutch Railways (NS) had abused its dominant market position by making an unrealistically low bid, unduly acquiring information on the tenders of its competitors, and using this information to increase its chances. The ACM fined NS EUR 40.95 million for manipulating this tender. Several NS directors currently face criminal fraud charges.
Clearly, anti-trust and fraud are once again hot issues in the Dutch procurement market.
To avoid any complications when participation in a tender, we recommend that:
- you do not discuss your participation in a tender with competitors, including whether you or a competitor are participating at all;
- you independently establish your price;
- you make no arrangements with competitors about participating in specific tenders.