The Czech Office for the Protection of Competition (UØOHS) announced that it conducted on-site inspections at the premises of four companies operating in the building construction sector. The inspections, which took place last week, were part of a preliminary investigation into suspected cartel agreements related to bid rigging.
According to the authority, the operation yielded evidence suggesting the existence of two possible collusive arrangements among the inspected entities. The Office emphasized, however, that the initiation of a local investigation does not imply that anti-competitive conduct has definitively occurred, nor does it guarantee that formal administrative proceedings will follow or sanctions will be imposed.
This move underscores the UØOHS’s ongoing focus on maintaining competitive integrity in the public procurement sector, which has historically been prone to anti-competitive behavior. Previous enforcement actions, such as the 2015 construction cartel case where fines exceeded CZK 2 billion (approximately USD 88 million), demonstrate the authority’s willingness to pursue serious violations vigorously.
A Sector Under Scrutiny
The Czech construction industry, while being a major contributor to the national economy, has faced consistent challenges related to competition and transparency. Public procurement accounts for a significant share of industry revenues, making the sector especially vulnerable to bid-rigging schemes. Market concentration, longstanding relationships between bidders, and limited oversight mechanisms have created conditions where collusion may occur more easily.
In recent years, the UØOHS has increased its scrutiny of procurement procedures, especially in infrastructure and municipal projects. The authority has also enhanced its cooperation with criminal enforcement bodies and promoted the use of leniency programs to uncover covert agreements. A construction company fined in the past for allegedly colluding in public procurements was Hochtief. The company’s stock price was 3% down the day after the announcement of the new inspections.
Potential Legal Consequences
Should the companies under investigation be found guilty of cartel behavior or bid rigging, they may face severe penalties under Czech and EU competition law. Domestically, the UØOHS can impose fines of up to 10% of a company’s worldwide annual turnover. Companies may also face exclusion from public tenders for up to three years and the nullification of contracts secured through unlawful means. While competition law violations in the Czech Republic are administrative in nature, individuals involved could potentially face criminal liability if corruption or fraud is uncovered during the investigation.
In cases where the conduct has cross-border implications, the European Commission may intervene and impose additional fines under EU competition rules. Furthermore, injured parties, such as municipalities or rival bidders, may seek damages through civil litigation.
Industry stakeholders are now watching closely to see whether the current investigation will lead to formal charges.
As the investigation progresses, the Office is expected to issue further statements should the case advance to the next procedural stages.
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