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CADE condemns companies for cartel in the building maintenance services market

Cartel

Companies committed anticompetitive practices in public and private bids between 2000 and 2006
published: Aug 21, 2017 07:25 PM last modified: Aug 21, 2017 07:25 PM

 On the judgment session of 16 August, the Administrative Council for Economic Defense – CADE condemned five companies for bid rigging in building maintenance services market. The fines imposed sum up to BRL 11.9 million (Administrative Proceeding No. 08012.006130/2006-22)

The companies comdemned are Álamo Engenharia S/A, Eletrodata Instalações, Serviços Ltda., Projetos Engenharia, Comércio e Montagens Ltda., MZE Moreira Zappa Engenharia Energia Climatização and Redes Ltda. (current RMZ Engenharia Elétrica Ltda.).

In addition to the fines, CADE has prohibited the company Projetos Engenharia, Comércio e Montagens Ltda., which was considered as one of the leaders of the cartel, from participating in publics bids for the period of five years. 

The administrative proceeding was the result of a leniency agreement signed with the company Emerson Sistemas de Energia Ltda. (current Vertiv Tecnologia do Brasil Ltda.) and was initiated in 2006, after a dawn raid carried out in the offices of the investigated companies. The documents seized and the proofs produced during the procedural instruction showed that the parties held meetings to define prices and share among themselves public and private bids for hiring building maintenance services.

The Reporting Commissioner, Mr. Paulo Burnier explained that “The cartel was formed by a group of rival companies whose employees exchanged among themselves sensitive commercial information about the prices applied in private and public bids for building maintenance services”.

The anticompetitive practices would have lasted at least six years, from 2000 to July 2006, when the first dawn raid occurred.

TCCs 

During the judgement session, CADE’s Administrative Tribunal determined the suspension of the proceeding regarding the companies Araújo Abreu Engenharia S/A, Wechsel Ltda., and WH Engenharia RJ Ltda. These companies signed a Cease and Desist Agreement (TCC in its acronym in Portuguese) with CADE, concerning this administrative proceeding. Through the agreement, the companies confirmed their participation in the conduct and committed themselves to cease the irregularities and fully cooperate with the investigation.

Furthermore, the three companies will have to pay a pecuniary contribution of BRL 19.5 million. The investigation related to them will remain suspended until the authority attests the fulfilling of the agreement.

Regarding Conbras Serviços Técnicos de Suporte S/A (current Conbras Engenharia Ltda.), the measures determined by CADE by means of the TCC signed in October 2016, were declared as fulfilled. For this reason, the accusations against the company were filled on the session of 16 August. As a result of the signature of the TCC, Conbras payed a pecuniary contribution of BRL 13.6 million.