Bid rigging: Same legal adviser preparing the tenders

“The CJEU was ruling on a referral for preliminary ruling from the Latvian Supreme Court, in a case involving three Latvian food companies that had been accused of breaching national competition law. The three companies had all submitted bids to a tender for the supply of food products to educational establishments by the city of Jurmala.

Unknown to them, all three companies had been using the same legal adviser; and an employee at the firm used one of the tenders as a point of reference when preparing the other two. […]

The CJEU said that it was possible that, in certain circumstances, “a service provider which presents itself as independent is in fact acting under the direction or control of an undertaking that is using its services”. If this was the case, then “the undertaking using the services could be held liable for the possible unlawful conduct of the service provider”. However, assuming the service provider was “genuinely independent”, liability could only be passed on to the engaging company if it was aware of that conduct, or if it could “reasonably have foreseen it and was prepared to accept the risk”, the CJEU said.

The ECJ confirmed that unlike an employee, whose actions can be attributable to the company for which he is employed, an independent service provider is a separate undertaking from those companies for which it provides services. As such, the contractor’s actions cannot automatically be attributed to that company.

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