Brazil launches price-fixing probe into 18 companies

20 March 2014

Overview of train carriages stopped in a parking place in Sao Paulo, on 18 June, 2003. — Image caption,
Brazil said the cartel operated across the country, with contracts for Sao Paulo's metro among other networks

Brazil has said it is investigating corruption and price-fixing allegations against 18 companies, including Siemens of Germany and Alstom of France.

Brazil's antitrust agency accused the firms of being part of a cartel to fix prices for the construction and upkeep of metro and train networks, including in Rio de Janeiro and Sao Paulo.

Siemens said it had "zero tolerance for any kind of illegal conduct".

Alstom said it was "taking the allegations very seriously".

Brazil's Administrative Council for Economic Defence (Cade) said the 18 companies were part of a cartel involved in 15 projects valued at $4 billion (£2.4bn) in total, with contracts in the Brazilian Federal District and the states of Rio de Janeiro, Sao Paulo, Minas Gerais and Rio Grande do Sul.

Cade is part of Brazil's justice ministry, responsible for investigating anti-trust cases.

"Cade has started (...) administrative proceedings to investigate alleged cartel conduct in the bidding for trains and metros between at least 1998 and 2013," it said .

"Eighteen companies and 109 employees of these companies are accused of involvement in illegal (activities)."

'Cooperation'

According to Cade, the companies adopted "several anti-competitive strategies", such as the prearrangement of offers tendered in bidding processes, and bribed dozens of officials to secure the contracts.

At times, it alleged, the cartel would also determine which company would win a bid by putting only one forward to tender an offer.

In a statement sent to the Associated Press (AP) agency, Siemens said it was "collaborating'' with the investigations, which it said would "lead to a more ethical and transparent business environment in Brazil".

In another statement seen by AP, Alstom said it was "taking the allegations very seriously" and "carrying out its own thorough investigation".

Cade has also named companies from Spain, Canada, South Korea and the United States, among other countries.

It said the firms that allegedly formed part of the cartel would be summoned to present their defence.

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