Asphalt cartel issue - updated quarterly
Situation as per 8 May 2013
(Source: Interim report 1-3/2013)
In 2009, the Supreme Administrative Court (SAC) ordered Finnish asphalt industry companies to pay an infringement fine for violations of the Act on Competition Restrictions.
On 31 March 2013, there were a total of 52 claims for damages brought by municipalities and the Finnish state (Finnish Transport Agency) pending against Lemminkäinen and other asphalt industry companies in the District Court. The claimants contend that restrictions on competition have caused them damages. The total amount of damages currently sought from Lemminkäinen totals about EUR 129 million. The claims presented in the statements of claim differ from each other as regards their amounts and grounds.
As it stands, the ruling rendered by the SAC in 2009 does not mean that Lemminkäinen or the other asphalt industry companies actually caused any damages to their asphalt contract clients. The ruling does not concern the individual contracts that the claimants cited in support of their claims, nor does the ruling concern the pricing of individual contracts. The SAC has not investigated the contention that inflated prices have been charged for the contracts.
Lemminkäinen's initial position is that the claims for damages are without foundation. The claims will be processed in the order and schedule set by the District Court. The main proceedings on the claims made by 38 municipalities and the Finnish Transport Agency began in September 2012 and ended on 12 April 2013. The damages presented in these 39 claims total about EUR 121 million. According to a statement made by the District Court, its decisions on these claims will be announced in autumn 2013 at the earliest.
No commencement date has yet been set for the main proceedings for the other 14 claims.
In accordance with IFRS regulations, no provisions have been made in respect of the claims of the municipalities and the Finnish Transport Agency that are currently pending in the District Court, or for the demands contained in the said claims.
Lemminkäinen will provide information on the proceedings when necessary, either in its interim reports or in separate releases.
Summary of events
Handling of claims for damages: Preparatory sessions for the trial begin in January 2012. The main proceedings will begin in September 2012 and are preliminarily planned to continue until April 2013. The ruling schedule is currently not yet available.
Supreme Administrative Court decision: asphalt industry companies are ordered to pay an infringement fine totalling EUR 82.6 million for violating the Act on Competition Restrictions. In accordance with the Finnish Competition Authoritys proposal, the infringement fine imposed on Lemminkäinen totals EUR 68 million. Lemminkäinen expenses EUR 54 million for Q3 of the year.
Lemminkäinen appeals to the Supreme Administrative Court against a Market Court decision.
Market Court decision: Asphalt industry companies are ordered to pay EUR 19.4 million in infringement fines, of which Lemminkäinens share is 14 million. Lemminkäinen expenses EUR 14 million for Q4 of the year.
The Finnish Competition Authority proposes that an infringement fine be imposed on seven asphalt industry companies and the Finnish Asphalt Association for violations against competition legislation in the suspected asphalt cartel matter. The Finnish Competition Authority proposes an infringement fine of EUR 68 million on Lemminkäinen.
In June 2003, the Finnish Competition Authority submits a draft proposal to Lemminkäinen regarding a suspected asphalt industry cartel. In the draft proposal, the Finnish Competition Authority suspects that a nationwide cartel would have been operative in the asphalt industry in 1995-2002, with all significant industry actors participating.
Updated 16 May 2013