Belgian Competition Authority Tackles Tendering Cartel but also Penalises No-Poaching Arrangement in Private Security Firms Cartel Case

• 04/07/2024
• News

The Belgian Competition Authority (BCA) announced yesterday that it imposed fines totalling EUR 47 million on three private security firms, Securitas, G4S and Seris, for collusive behaviour that lasted from 2008 to 2020.

The infringement was three-pronged:

• The parties engaged in a price-fixing cartel by agreeing to apply minimum hourly tariffs for their security services.
• The parties coordinated their behaviour in relation to public procurement and other tendering procedures. They decided which party would participate in a given procedure, made sure that a firm would not lose existing customers, and agreed on prices.
• The parties agreed not to poach each other’s employees. This is the first no-poaching arrangement penalised by the BCA which characterised the practice as an infringement by object.

Despite its novelty, this decision will not be tested in court, as the parties settled the case. This means that, in exchange for a lighter fine, the parties admitted guilt and waived their right to appeal the decision. Securitas did not receive a fine as it obtained immunity under the BCA’s leniency programme. G4S and Seris also benefitted from fine reductions under both the leniency and the settlement programmes. G4S was given a fine of EUR 35,895,112 while Seris was fined EUR 11,200,000.

This settlement does not come as a surprise given the plea agreement of G4S with the US Department of Justice (DOJ) and the prosecution by the DOJ of several more parties, including Seris. The involvement of the DOJ is explained by the fact that the suspected price-fixing and bid rigging practices covered agreements to provide security services to facilities of the US Department of Defense and the North Atlantic Treaty Organisation located in Belgium. In this plea agreement, G4S acknowledged that it had “participated in a conspiracy among major Belgian security services providers, the primary purpose of which was to suppress and eliminate competition by allocating customers, rigging bids, and fixing prices for certain contracts for the provision of security services in Belgium”. According to the plea agreement, the largest US contract affected by these practices amounted to EUR 70 million.

The DOJ also indicted Seris and several other defendants for a period starting “at least as early as Spring 2019 and continuing until at least Summer 2020” and challenged meetings and encrypted messages aiming at allocating tenders and making sure that the participants that were not allocated a tender would offer artificially high prices.

This case also had ramifications elsewhere. The former CEO of G4S became CEO of postal operator bpost in 2019 and was let go in March 2021 because he allegedly gave bpost insufficient information regarding the competition case (and its ramifications in the US, where he is facing charges).

The decision adopted by the BCA may not be the last procedural step in this case: while 11 individuals obtained immunity from prosecution, one unidentified person, presumably the former CEO of G4S, is still being prosecuted.

• The parties engaged in a price-fixing cartel by agreeing to apply minimum hourly tariffs for their security services.
• The parties coordinated their behaviour in relation to public procurement and other tendering procedures. They decided which party would participate in a given procedure, made sure that a firm would not lose existing customers, and agreed on prices.
• The parties agreed not to poach each other’s employees. This is the first no-poaching arrangement penalised by the BCA which characterised the practice as an infringement by object.

Despite its novelty, this decision will not be tested in court, as the parties settled the case. This means that, in exchange for a lighter fine, the parties admitted guilt and waived their right to appeal the decision. Securitas did not receive a fine as it obtained immunity under the BCA’s leniency programme. G4S and Seris also benefitted from fine reductions under both the leniency and the settlement programmes. G4S was given a fine of EUR 35,895,112 while Seris was fined EUR 11,200,000.

This settlement does not come as a surprise given the plea agreement of G4S with the US Department of Justice (DOJ) and the prosecution by the DOJ of several more parties, including Seris. The involvement of the DOJ is explained by the fact that the suspected price-fixing and bid rigging practices covered agreements to provide security services to facilities of the US Department of Defense and the North Atlantic Treaty Organisation located in Belgium. In this plea agreement, G4S acknowledged that it had “participated in a conspiracy among major Belgian security services providers, the primary purpose of which was to suppress and eliminate competition by allocating customers, rigging bids, and fixing prices for certain contracts for the provision of security services in Belgium”. According to the plea agreement, the largest US contract affected by these practices amounted to EUR 70 million.

The DOJ also indicted Seris and several other defendants for a period starting “at least as early as Spring 2019 and continuing until at least Summer 2020” and challenged meetings and encrypted messages aiming at allocating tenders and making sure that the participants that were not allocated a tender would offer artificially high prices.

This case also had ramifications elsewhere. The former CEO of G4S became CEO of postal operator bpost in 2019 and was let go in March 2021 because he allegedly gave bpost insufficient information regarding the competition case (and its ramifications in the US, where he is facing charges).