EU cracks down on electricity-gear cartel


The European Commission has slapped a record 750 million euro fine on a group of heavy power-gear suppliers, including Germany’s Siemens AG, in a bid to secure genuine competition in EU electricity markets.

“Between 1988 and 2004, the companies rigged bids for procurement contracts, fixed prices, allocated projects to each other, shared markets and exchanged commercially important and confidential information,” the Commission said in a statement on 24 January.

The move is the latest in a series of efforts by EU anti-trust chief Neelie Kroes to open up energy markets after a recent inquiry into the sector confirmed “serious competition problems” (EURACTIV 11/01/07).

Eleven companies involved in manufacturing heavy electrical equipment for large power utilities were targeted by the Commission. They include: ABB, Alstom, Areva, Fuji, Hitachi Japan, AE Power Systems, Mitsubishi Electric Corp, Schneider, Siemens, Toshiba and VA Tech. 

However, Switzerland’s ABB was not fined, as it provided the Commission with the information it needed to crack down on the cartel.

With more than €396 million, Siemens was slapped the highest fine – more than half of the total – for its alleged leadership role in the cartel. Siemens immediately said it would appeal the fine, saying that it was “completely exaggerated” considering that the employees found guilty of price-fixing “were suspended immediately after accusations became known”.

The next highest fines went to Japan’s Mitsubishi (€118 million), Toshiba (€91m) and France’s Alstom (€65m) and Areva (€53m).

“Suppliers informed each other of calls for tender…and co-ordinated their bids in order to secure projects for the cartel members according to their respective cartel quotas. Alternatively, they would agree to respect minimum bidding prices,” the Commission said.

Also part of the cartel agreement was that “the Japanese companies would not sell in Europe, and the European companies would not sell in Japan”. 

It also said that the total €750m fines imposed in this case were “the largest set of fines ever imposed on a single cartel”. 

According to German newspaper Süddeutsche, the next Commission investigation on electricity markets may involve E.ON and RWE.

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