CMS Expert Guide: Right Bidding vs Bid Rigging in Sweden

The bidding process in public procurements is regulated by four different laws that govern public procurement in Sweden, which are: The Public Procurement Act (2016:1145) (implementing the EU directive 2014/24), the Act on Procurement in the Supply Sectors (2016:1146), the Act on Procurement of Concessions (2016:1147) and the Act on Procurement in the Field of Defense and Security (2011:1029), each one implementing an EU public procurement directive. The Public Procurement Act is the most commonly used law. 

The abovementioned laws are aimed and designed for different types of public procurements in different types of sectors, although procurement of concessions is regulated in a special law. The acts are themselves anti-corruption laws which through regulations on public advertising, transparency throughout the process, proportionality of requirements to needs and equal treatment of all suppliers aims to ensure fair competition, as well as maintaining a transparent and efficient spending of public funds.  

As for bidding in private tenders, the Contracts Act (1915:218) contains basic regulations in respect of concluding contracts and the bidding process.  

Bid rigging may also constitute to a cartel infringement, which is regulated by the Swedish Competition Act (2008:579) and the Treaty on the Functioning of the European Union (“TFEU”).  

In cases of bid rigging, the Swedish Competition Authority (“SCA”) may decide that an undertaking shall pay a special fee (competition law fine) if the undertaking, or a person acting on behalf of the undertaking, has intentionally or negligently violated e.g. the prohibitions set forth in the Competition Act or the Treaty on the Functioning of the European Union. The fee accrues to the Swedish state. The fine in respect of conduct in restraint of competition shall not exceed ten percent of the undertaking’s annual turnover for the preceding financial year. If the competition law fine is addressed to an association of undertakings for an infringement relation to the activities of its members, the fine shall not exceed ten percent of the aggregate turnover in the preceding business year of the member undertakings active on the market affected by the infringement. 

The public procurement laws do not provide for the invalidity of an awarded contract affected by bid rigging. However, contractual terms that violate the competition rules (including bid rigging) are considered automatically void under Chapter 2 Section 6 of the Competition Act. 

If the contracting authority has sufficiently probable indications that the supplier has entered into agreements with other suppliers aimed at distorting the competition the supplier may be excluded from participating in public procurements under Chapter 13, Section 3.4 in the Swedish Public Procurement Act. However, the contracting authority may not base the decision to exclude a supplier on an event that occurred more than three years ago.  

As explained under Section 2 above, the contracting authority may, but does not have to, under certain conditions such as bid rigging exclude the supplier from the procurement process. However, a supplier who is subject to an exclusion ground shall not be excluded if the supplier has taken various measures (“self-cleaning”) under Chapter 13 Section 5 in the Procurement Act. Such measures can include cooperating with the authorities, paying any fines or penalties and taking concrete measures to ensure that the error is not repeated. A supplier shall not be excluded if it demonstrates its reliability by (1) compensating or undertaking to compensate for damage caused by the crime or misconduct, (2) exhaustively clarified the facts and circumstances by actively cooperating with the investigating authorities and (3) has taken concrete technical, organizational and personnel measures to prevent the crime or misconduct. The measures taken by the supplier shall be assessed considering the seriousness of the crime or misconduct and the specific circumstances of the crime or misconduct.  

In addition, it is required that the prohibition is necessary from a public point of view. In this assessment, the court must consider, whether the trader has previously been convicted of a criminal offense in the course of business activities or whether the infringement of the competition rules has (1) been systematic, (2) aimed at significant profit, or (3) caused or was intended to cause significant harm. 

Persons who are in the management of companies involved in bid rigging can be trade banned under Chapter 3 Section 24 in the Competition Act and Section 7 in the Trading Prohibition Act if they have seriously breached their business obligations in a way that has led to an infringement of the prohibitions on anti-competitive cooperation, as referred to in Chapter 2, Section 1 of the Competition Act or in Article 101 of the TFEU. The SCA may submit a claim for a trade ban pursuant to Section 7 in the Trading Prohibition Act through an application to the Swedish Patent and Market Court, which decides whether a person should be banned from trading. The Court's decision can be appealed to the Patent and Market Court of Appeal. 

The trade ban is valid for a minimum of 3 years and a maximum of 10 years, and applies from the moment the decision on trade ban becomes legally binding. Violation of a trade ban can lead to imprisonment. There is no possibility to be exempted from the trade ban through e.g. self-cleaning. 

Yes. The Swedish NCA has developed a guideline for procuring authorities on how to detect and prevent bid rigging: https://www.konkurrensverket.se/informationsmaterial/rapportlista/arlighet-ska-lona-sig---sa-upptacker-och-forebygger-du-anbudskarteller/ (in Swedish). 

Also the Swedish Procurement Authority has developed a guideline on preventing corruption in procurement: https://www.upphandlingsmyndigheten.se/forebygg-korruption/nar-upphandlingen-genomfors/ (in Swedish).  

The Swedish NCA in respect of competition provides a guideline on collaborations in the procurement process: 

https://information.konkurrensverket.se/upload/samarbete/story.html (in Swedish). 

The Swedish Procurement Authority in respect of public procurement provides a guideline on lawful collaborating with other stakeholders in the procurement process: 

https://www.upphandlingsmyndigheten.se/en/conducting-business-with-public-sector-stakeholders/collaborating-with-other-stakeholders-in-the-procurement-processes/ 

The SCA does not keep statistical records of all its cases and decisions within the field of competition. However, on their website there is a selection of cases, which are the ones we will present in this guide.  

From 2020 to 2022 sixteen (16) anti-competitive cooperation cases were opened by the SCA (bid rigging included). Of all cases, only one case involved bid rigging in public procurement tenders. The case was opened in 2020 and issued in 2022. However, the decision of the SCA was appealed and the Patent and Market Court delivered a judgement in 2023. 

From 2020 to 2022 fifteen (15) anti-competitive cooperation decisions were issued. A total of three (3) bid rigging decisions have been issued between 2020 and 2022. 

2020: one of the six (6) cases opened by the SCA concerning agreement restricting competition involved bid rigging.  

2021: none of the eight (8) cases opened by the SCA concerning agreement restricting competition involved bid rigging.  

2022: none of the two cases opened by the SCA concerning agreement restricting competition involved bid rigging.  

Thus, the percentage of bid rigging cases in relation to the overall number of cartel cases was 17 % in 2020, 0% in 2021 and 0 % in 2022. 

2020: the SCA imposed fines in three cases concerning agreements restricting competition to a total of 2 355 000 SEK (approximately EUR 235 000). However, none of these cases did concern bid rigging. 

2021: the SCA did not impose any fines during 2021.  

2022: the SCA imposed fines in one case concerning restricting competition through bid rigging to a total of 1 130 000 SEK (approximately EUR 113 000). The SCA also imposed fines in two other cases on a total of 2 369 000 SEK (approximately EUR 236 900) where one of them concerned bid rigging. However, these last two cases became legally binding in 2023 after appeals to the Patent and Market Courts. 

Yes, under the Competition Act bid rigging cases are included in the scope of leniency. Leniency means that the company under certain conditions is relieved of the competition law fine that the SCA may decide to impose on a company that has infringed the competition rules. 

There is no criminal liability for violations of competition rules such as bid rigging in Sweden. The Swedish Government has considered to introduce rules on criminal liability for infringements of the competition rules but has concluded that criminal liability for such infringements, including bidding cartels, should not be introduced (Prop. 2007/08:135, p. 148-153).  

The central issue in considering criminalization was, according to the Government, whether such a measure would increase the overall efficiency of the system. It was the Government's assessment that a penal regulation is not an effective way of combating cartels because a consequence of criminalisation is that the system of remission and reduction of competition fines will only be applicable in a limited number of cases. In addition, it was considered a real risk that undertakings will have no incentive to report infringements if representatives and employees of the undertaking thereby risk criminal sanctions. Moreover, the Government considered that criminal investigations may delay the SCA's investigations and prosecution of cartel cooperation.  

Yes, one of the primary tasks of the SCA is the prevention of corruption and anti-competitive cooperation, especially regarding bidding cartels in public procurement. Within the SCA there is a department called the "Cartels and Acquisitions Unit" which specifically focuses on anti-competitive cooperation between competing companies and merger control. 

There are several different sectors that have been affected by bid rigging over the last ten years. Historically, sectors identified by the SCA as being at risk of cartels and corruption (including bid-rigging) are construction, pharmaceuticals, IT, medical devices, transport, cleaning, travel, office supplies, food and laundry. 

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