The Supreme Administrative Court has ordered the Lemminkäinen construction company and its competitors to pay EUR 82.55 million in fines for operating a price fixing cartel for asphalt works on municipal projects. The cartel activity was in violation of Finland’s competition legislation, the Court affirmed.
Lemminkäinen’s share of the fine - by far the largest ever handed out in Finland for violations of competition legilsation - was EUR 68 million.
The sum is the same that was originally suggested by the Finnish Competition Authority.
The fines imposed on the six other construction firms that took part in the cartel are for the most part also very close to the Competition Authority’s original view.
In December 2007, the Market Court had significantly reduced the penalties called for by the Finnish Competition Authority. In the case of Lemminkäinen, for instance, the Market Court imposed a mere EUR 14 million fine.
In the Supreme Administrative Court’s view Lemminkäinen was leading a nationwide cartel.
The Court stated that the companies operating in the asphalt business led by Lemminkäinen had agreed on the nationwide division of the asphalt market.
Compensation for damage complaints by several municipalities still await the companies that took part in the cartel. The municipalities seek compensation for the overcharging caused by the cartel activity.
Immediately after the announcement of the Supreme Administrative Court ruling, Lemminkäinen, in turn, issued a profit warning.
The company believes its result for this year will remain clearly negative because of the issued fine.
Already in 2007 Lemminkäinen entered the EUR 14 million fine issued by the Market Court as an expense in its balancing of the accounts.
Already by 10.30 a.m. yesterday Lemminkäinen’s stock price had dropped by some 9% on the Helsinki Stock Exchange, though by day's end the slide had turned around and the company's share closed only 2.56% lower.
The Finnish Competition Authority commenced its investigation of the cartel suspicions already seven years ago.
Seven construction companies in all were suspected of having taken part in illegal price cooperation in 1994-2002.
