On 26 June 2024, the Hellenic Competition Commission announced that it had carried out on-site inspections at a large number of companies as part of an ex officio investigation into a possible horizontal collusion to rig public tenders (bid rigging) concerning the supply and installation of integrated remote monitoring and control systems for household water meters. Water meters are small devices installed on water supply networks outside residential buildings, used to measure and bill water consumption, as well as to detect leaks and theft.
The Hellenic Competition Commission, as an Independent Authority entrusted with ensuring the proper functioning of the free market, is responsible for enforcing competition rules under Law 3959/2011 (Government Gazette Α’ 93/20.4.2011) and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).
The Commission’s intervention in the present case aimed to examine whether there had been a potential infringement of Article 1 of Law 3959/2011 and Article 101 TFEU, which prohibit collusion between undertakings (agreements, decisions by associations, or concerted practices) that have as their object or effect the restriction of competition.
More specifically, Article 101 TFEU and Article 1 of Law 3959/2011, provide, among other things, that,
“1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.”
In parallel with the aforementioned legislation, it should be noted that Article 1A of Law 3959/2011 prohibits unilateral practices that amount to an invitation to engage in a prohibited collusion and the disclosure of future pricing intentions for products and services to competitors, while Article 2 of Law 3959/2011 and Article 102 TFEU prohibit the abusive conduct of undertakings holding a dominant position in the market.
The Hellenic Competition Commission also stated in its announcement that the conduct of such inspections concerns undertakings from which evidence may be gathered regarding anti-competitive practices in the markets under investigation and does not imply that the undertakings are engaged in anti-competitive conduct, nor does it prejudge the outcome of the investigation.
On 18 April 2024, two months prior to the Commission’s intervention, the investigative team of Reporters United published a report revealing a complaint by an official of the Greek public sector addressed to the competent state authorities, concerning issues of overpricing in public procurement contracts amounting to €265 million under an EU co-funded programme for the purchase and installation of water meters in municipal water supply networks.
According to the journalistic investigation, although the programme was carried out in 51 municipalities through a decentralised process, concerns were raised about possible coordinated behavior. In 80% of the tenders, only one company submitted a bid, and the majority of contracts went to just five companies. The whistleblower from the public sector highlighted several problematic aspects beyond overpricing, including signs of overspecification, irregularities in how product prices were assessed, overlapping project scopes that suggest double funding from other programmes, practices aimed at circumventing fair competition, subjective criteria in the evaluation of bids, recurring procedural errors, and pricing patterns indicative of coordinated strategy among suppliers.
In a state governed by the rule of law, public authorities are required to strictly adhere to national and EU legislation to ensure legality and transparency in the conduct of public procurement procedures and the conclusion of public contracts.
However, the case under examination suggests that, according to the Hellenic Competition Commission, there are grounds to suspect a potential horizontal collusion involving bid rigging in the procurement and installation of integrated remote monitoring and control systems for household water meters. Such conduct may constitute a violation of Article 1 of Law 3959/2011 and Article 101 TFEU, which prohibit collusion between undertakings that has as its object or effect the restriction of competition.
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