Saudi Arabia: Hefty penalty for firms involved in tender collusion
Violator liable to 10% fine of annual sales, warns antitrust agency
Cairo: Companies involved in collusion related to tenders and offers in Saudi Arabia are liable to a fine of 10% of their total annual sales, a government antitrust agency has warned.
Such collusion, deemed a violation of the kingdom's competition law, typically involves a secret agreement between two or more competitors to coordinate offers in government tenders or share adjudications, as explained by the General Authority for Competition.
The agency added that other forms of collusion in government adjudications include arrangements between competitors to have some withdraw or refrain from participation, ensuring that one emerges as the ultimate winner.
Furthermore, conspiracy involves the so-called "offer rotation" whereby the businesses involved agree to successively win projects, share projects on a geographical basis, or arrange that the winner of an adjudication would compensate the losers financially or grant them subcontracts.
Saudi authorities have recently announced penalties against several companies found implicated in anti-competitive practices.
A total of SR6.4 million fines were imposed in August on 14 contracting companies for having breached the kingdom's competition law by getting involved in collusion in their price offers for government adjudications. The penalties were the second such measure announced in less than a month.
Earlier this month, the General Authority for Competition announced imposing SR77.5 million fines on other contracting firms for committing violations of collusion and coordination among themselves in government adjudications. The agency said it will fully publish the decision after it becomes final.
In June, the same authority announced slapping SR14.8 million fines on six companies operating in transporting cars and other goods after they were found implicated in agreeing among themselves to hike up prices.
In April, the agency penalised 14 cement companies with a fine of SR10 million each for colluding to raise cement prices and monopolise the market.