German Competition Authority Fines Road Maintenance Companies €60.3 Million Over Decade-Long Cartel

Key Takeaways

• €60.3 Million in Fines: Germany's Bundeskartellamt imposed approximately €60.3 million in fines against companies involved in a cartel affecting the DSK road maintenance market.
• Contracts Were Allocated Before Tenders: Investigators found participating companies agreed which firm would win contracts, allocated customers among themselves, and submitted coordinated cover bids from 2010 until September 2019.
• Coded Messages Hid Price Agreements: According to the authority, cartel members concealed agreed prices using references to beer, sausages, hotel rooms, sponsorship payments, football events, and other coded descriptions exchanged through meetings, emails, WhatsApp, and Signal.
• Public Infrastructure Was Directly Affected: The conduct involved numerous public road maintenance contracts across Germany, along with certain private-sector projects involving airports, ports, and test-track operators.

Deep Dive

The Bundeskartellamt has imposed fines totaling approximately €60.3 million on companies it says spent nearly a decade deciding among themselves who would win contracts before public authorities had finished inviting bids. The authority concluded that the firms divided customers, coordinated prices, and exchanged cover bids in the market for Dünne Asphaltdeckschichten in Kaltbauweise, or DSK, a cold-applied asphalt surfacing technique widely used to extend the life of roads.

The companies sanctioned were AS Asphaltstraßensanierung, BITUNOVA, Kutter Spezialstraßenbau, Possehl Construction, Liesen, OAT, and Otto Alte-Teigeler. The Bundeskartellamt also identified VSI Sanierungs- und Baugesellschaft as a participant in the cartel. During the investigation, VSI was merged into Possehl Construction, and the fine relating to VSI was imposed on Possehl as its legal successor.

A Cartel Built on "Regular Customers"

According to the Bundeskartellamt, the arrangement began in 2010 when Kutter, Bitunova, Possehl, and OAT agreed to allocate DSK customers across Germany. VSI, Liesen, and AS later joined the scheme. The system itself was straightforward. A company that first established a customer for the DSK construction method would ordinarily keep that customer, while the others stood aside. If one participant found itself short of work, the group adjusted the arrangement by redirecting contracts or forming consortiums so that several companies could share the business.

The appearance of competition remained intact. The competition itself did not. Investigators said the companies regularly coordinated bids before tenders were submitted, agreeing which firm would win and establishing the minimum level competing bids needed to exceed. The practice affected numerous public procurement exercises across Germany, as well as contracts issued by private organizations including airports, ports, and automotive test-track operators. It extended across projects involving both large and small DSK paving equipment, as well as hand-laid work.

Bundeskartellamt President Andreas Mundt said the companies had effectively turned an important segment of Germany's road maintenance market into private territory.

"For many years the leading DSK providers in Germany funnelled a great number of public contracts to each other," Mundt said. "They had agreed that, as a general rule, all future DSK contracts for a specific customer should go to the provider that first secured that customer for the DSK construction method."

Prices Hidden in Plain Sight

The authority said participants met roughly once a month during the construction season, usually in spring and summer, often gathering in Kassel because of its central location. When face-to-face meetings were impractical, they communicated by telephone, email, WhatsApp, or Signal.

The details uncovered by investigators suggest the participants understood exactly what they were doing. Rather than exchange prices directly, they disguised them. Fixed bid amounts became the price of a sausage or a beer, the cost of a hotel room, a sponsorship payment, the number of people attending an event, or even the ticket price for football matches and carnival celebrations. On other occasions, the authority said, prices were concealed inside requests for subcontracted work such as asphalt milling or crack repairs.

The arrangements continued until September 2019. The investigation itself began elsewhere. The Bundeskartellamt said the DSK case emerged from an earlier investigation into road repair contracts that led to coordinated dawn raids with the Düsseldorf Public Prosecution Office and North Rhine-Westphalia's Criminal Police Office. Evidence gathered during those searches prompted additional raids in September 2020 and March 2021 focused specifically on the DSK market.

Throughout the proceedings, the competition authority said it worked alongside criminal prosecutors examining potential offenses under Section 298 of the German Criminal Code, which prohibits collusive tendering. Several companies, including Possehl/VSI, Bitunova, Kutter, and AS, cooperated with investigators under the Bundeskartellamt's leniency program. The authority said that cooperation was reflected as a mitigating factor when calculating the fines.

All of the proceedings were concluded through settlement, and the Bundeskartellamt said the decisions imposing the fines are now final.

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