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JFTC surcharged Kanto Kensetsu, a participant in bidding for civil engineering works called by City of Kawagoe

JFTC surcharged Kanto Kensetsu, a participant in bidding for civil engineering works called by City of Kawagoe

January 23/2004
Japan Fair Trade Commission

The Japan Fair Trade Commission (JFTC),following a hearing examination initiated on 6 August 2003, issued a decision that a construction company, K.K. Kanto Kensetsu pay surcharge regarding the bid-riggings for engineering works called by Kawagoe City (Saitama Prefecture) based on Section 54-2(1) of the Antimonopoly Act.

1. Party concerned and total amount of surcharge

Company: K.K. Kanto Kensetsu

Surcharge: 6,650,000 yen

2. Outline of the decision

(1)Outline of Violation (Recommendation: 26 Apr. 2002)

20 companies including K.K. Kanto Kensetsu conspired to rig bids for civil engineering works let by Kawagoe City with nomination of construction companies (classification: A) which have an office in the City. This conduct infringed Section 3 (Unreasonable restriction of trading) of the Antimonopoly Act.

(2) The basis for the Computation of surcharge (Surcharge payment order: 20 June 2003)

The term of this conduct by K.K. Kanto Kensetsu is between 9 May 1998 and 8 May 2001. The sales under this term are 221,949,000 yen of three contracts.

(3) The issue of this case

The issue of this case is whether one (Furo-gawa river engineering work: Its bidders included a company (Saitama Liner K.K.) which was not a target of the JFTC recommendation.) of the three contracts which K .K. Kanto Kensetsu made with Kawagoe City is an object of surcharge computation.

(4) Judgement on this issue

(A) The basic idea on the object of surcharge computation

Section 7-2(1) of the Antimonopoly Act provides that the JFTC, regarding unreasonable restraint of trade effecting price, shall order the violator to pay a surcharge of an amount calculated on the basis of the sales amount of “the relevant goods or services,” of the period under which the violator was engaged in the business activities as implementation of the restraint.

(B) On Furo-gawa River Engineering Work

Furo-gawa River Engineering Work can be seen as a specific engineering work called by Kawagoe City, object of this infringement. K.K. Kanto Kensetsu became the predetermined winner according to the basic agreement of this bid-rigging case and informed other bidders including Saitama Liner K.K. of the bidding price and wined the contract with cooperation of the other bidders.

Thus, Furo-gawa River Engineering Work is the case in which the predetermined bidder was decided according to the agreement and the restrictive effect on competition occurred concretely.

Accordingly, Furo-gawa River engineering Work is an object of the surcharge computation.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.