LitFin backs construction cartel claims in Austria

LitFin is funding the pursuit of claims against Austrian construction companies STRABAG AG and the PORR Group for their alleged participation in a ‘construction cartel.’

The country’s Federal Competition Authority established in several decisions that at least 40 construction companies throughout Austria were involved in a cartel over a period of at least 15 years. Fines of over EUR 100 million were imposed on the two largest of these companies, STRABAG AG and the PORR Group. The companies admitted their involvement in the cartel and reduced their fines by cooperating extensively in the investigations. Investigations into further companies are ongoing.

The Authority found that, at least from July 2002 to October 2017, illegal price collusion was carried out by the participants and their bodies. The cartelists established a collusion system which largely eliminated competition in the Austrian construction industry through price agreements for public and private tenders, cover bids, market partition, the exchange of competition-sensitive information, as well as protection mechanisms and bidding rotation. At least 1127 construction projects were directly affected by this. According to the Cartel Court, however, there are a number of other projects that were certainly or very probably coordinated.

As a result of this conduct in violation of antitrust law, direct and indirect customers who commissioned construction projects during the cartel period suffered damages which can now be claimed.

The estimated damages caused by the cartel is immense. A study commissioned by the European Commission concluded that hardcore cartels result in a cartel-related markup of around 20 percent of the final price. Of course, the damage can also be considerably higher.

Austrian commercial law firm Brand Rechtsanwälte GmbH will be responsible for examining and enforcing the claims for damages. It is expected that a first instance claim will take between 1-3 years to receive a decision from a court.

 

 

 

 

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