Bundeskartellamt imposes fines on armaments suppliers on account of price-fixing agreements

The Bundeskartellamt has imposed fines totalling 1.3 million euros on three suppliers of the Bundeswehr (German Federal Armed Forces), which sell so-called rubber track pads and vibration dampers for military vehicles. The companies involved are GMT Gummi-Metall-Technik GmbH, Bühl, Paar Logistik GmbH, Aichach, and Willbrandt KG, Hannover. No fine was imposed on another company involved in the agreements, Diehl Defence Land Systems GmbH, Freisen (here: Remscheid factory), in accordance with the authority's leniency programme because it had reported the cartel to the Bundeskartellamt.

The companies are accused of concluding price and mutual sub-contracting agreements between 2010 and 2014 at invitations to tender issued by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support ("BAAINBw", formerly Federal Office for Arms Technology and Procurement, "BWB") for the procurement of rubber track pads and vibration dampers.

Andreas Mundt, President of the Bundeskartellamt "The companies' agreements always followed the same pattern: It was agreed on who should win the award, i.e. who should submit the best bid. The companies also agreed on who should supply the winner and in what proportions and at what price. Some of the agreements were made at personal meetings, some by telephone."

Rubber track pads are designed to prevent the track vehicles from damaging the road surface. They are made of rubber and stabilised by so-called base and intermediate plates. Vibration dampers are rubber-to-metal products which are used in military vehicles to mount radio equipment with the least amount of vibration. The two products are wearing parts or parts with limited durability. For this reason the German Federal Armed Forces have a continual demand for these products, which is covered by tender.

Not all the companies named supply both rubber track pads and vibration dampers. Depending on their product portfolios, not all the companies were involved in the alleged conduct during the entire period and in respect of all the products mentioned.
The level of fine is generally calculated according to the seriousness and duration of a competition law violation. All the companies cooperated with the Bundeskartellamt in uncovering the cartel, which led to a reduction of their fines in line with the authority's lenience programme.

The fines are all final.

On account of a suspicion of collusive tendering under § 298 of the German Criminal Code the proceedings against the natural persons involved were transferred to the Public Prosecutor's Office in Koblenz.