European and Japanese companies fined over illegal cartel

22 October 2009

The European Commission has imposed fines totalling EUR67.6 million on six power transformer manufacturers for operating an illegal cartel.

ABB, Areva T&D, Alstom, Fuji Electrics, Hitachi and Toshiba were found by the Commission to have used an oral market sharing agreement between 1999 and 2003. Siemens also participated in the cartel but was not fined as it brought the practice to the attention of the authorities.

European Commissioner for Competition Neelie Kroes believes that the existence of the “rip-off” cartel impacted not only the companies’ direct clients but also electricity consumers. She added that the Commission would increase fines for repeat offenders.

The Commission’s investigation began in 2007 and found that the seven cartel members divided up markets among the European and Japanese manufacturers. Siemens says that it launched its own investigation into the cartel as soon as the allegations were made and suspended employees involved in the violations.

The German firm was granted state’s witness status for its role in exposing the cartel and had its EUR33.36 million fine waived by the European Commission.

Fuji, Hitachi and Toshiba have been fined EUR1.7 milion, EUR2.4 million and EUR13.2 million, respectively. ABB’s fine was increased by 50 per cent to EUR33.75 million because it had previously taken part in a similar cartel.

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