Swedish Competition Authority to clamp down on building cartels

The Swedish Competition Authority (SCA) is to launch an investigation into building industry cartels, following research which showed that almost every other boss of a building company believes that cartels exist.

Writing in Dagens Nyheter’s debate section on Friday, the head of the competition authority, Claes Norgren, said that this was “an alarming figure which shows how deep the problem goes”.

Norgren revealed that the SCA has for several years been watching the industry, where, he said, weak competition from abroad combined with a few dominant players made it ripe for cartels.

The authority commissioned a research company to interview 600 heads of building firms. In their answers, 46% said they believed that there were cartels in their area. Of those, 27% said that cartels operated regularly or often.

“Cartels lead to higher costs both for individuals and for society,” said Norgren.

He pointed out that when an asphalt cartel was discovered and stopped a few years ago, prices in the road laying business fell by 25%-30%.

In the autumn, the SCA will focus its energy on rooting out uncompetitive behaviour in the industry.

“We will intensify our work on tracking down cartels and bring suspected companies before the courts,” said Norgren.

“There must be higher fines – cartels should not be profitable. A company should not be able to build the cost of a fine into a calculation when the operation is illegal.”

But there is little faith in the industry that the cartels can be stopped. Of those who said they were aware of cartels, 39% said that the chances that they would actually be uncovered were low or non-existent.

Sources: Dagens Nyheter