Am I a victim of a cartel?
Cartels are arrangements where competitors cooperate rather than compete. While SMEs should never engage in such arrangements, they also need to stay vigilant against potential cartel conduct.
Price fixing can take different forms. Watch out for the red flags listed below. The mere presence of a red flag does not necessarily mean price fixing, as there may be legitimate reasons. Report your concerns to the Commission when in doubt.
Potential red flags include:
Indications that confidential or sensitive business information is shared between competitors
Prices of different suppliers change by the same amount or percentage at the same time, with no relation to the underlying costs
Prices remain high despite a soft market with weak demand
A new supplier’s price being much lower than the market norm
The range of prices offered by different suppliers narrow suddenly
Regularity and/or similarity in price change over time across different suppliers
Prices remain stable across suppliers for a long duration
Discounts being eliminated across different suppliers, especially in a market where discounts were previously available
Suppliers refer to “industry norms ” to fend off your request for discounts or other more favourable terms
Market sharing can also take different forms.
Potential red flags include:
Companies suddenly stop selling in a territory or to a customer
Companies refer customers to other competitors
Companies that should want to win your business show no interest in it
A salesperson or bidder says that a particular customer or contract ”belongs” to a certain company
The existence of lists or maps kept by businesses indicating the allocation of customers or territories
Prospective bidders make references to territories or areas indicative of market sharing arrangements
Bid rigging is one of the most commonly encountered forms of anti-competitive conduct in private and/or public procurement.
Potential red flags include:
Similarities in bids – same irregularities (e.g., typos, miscalculations), handwriting, typeface, or identical pricing etc.
Bids are suddenly withdrawn without good reasons, or clearly qualified bidders are not bidding
The number of bidders being consistently low, especially for projects that would typically attract multiple bids
A bidder submits both its own and a competitor’s bid
A bidder who never wins but keeps on submitting bids or rarely bids but always wins when it does
Sudden and identical price increases across most bidders, without good explanations such as rising costs
The winning bidder repeatedly subcontracts work to unsuccessful bidders
A significant gap between the winning bid and all others
A bidder bids aggressively on some tenders but conservatively on other similar tenders, almost certainly losing the latter
Indications that confidential or sensitive business information is shared between bidders, or that bidders have met before bids are submitted
Suspicious statements by bidders indicating that they may have reached an agreement prior to their submissions of bids, such as justifying their prices by referring to some kind of ‘industry norms’
Competitors agreeing to limit or control their production or supply of goods and services may have a similar effect as agreeing to raise prices.
Potential red flags include:
Product shortages across the whole sector – with no obvious explanations
Indications that competitors are avoiding competition on quality – for example, setting industry standards that impose maximum levels of quality
Companies refer to quotas and limit their supply
Indications that companies agree to reduce supply – possibly by deciding between themselves who will withdraw from the market