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Erste Bank, other banks take cartel fine appeal to top EU court

Erste Bank AG and Bank Austria Creditanstalt AG, Austria's two biggest lenders, are among three financial institutions taking antitrust regulators to the European Union's highest court over a price-fixing fine.

The European Commission, the EU's antitrust agency in Brussels, fined eight Austrian banks €124.3 million ($163.3 million) in 2002 for fixing rates in hundreds of meetings in the „Lombard Club” cartel. A lower EU court in December upheld the decision, only cutting one fine against Oesterreichische Postsparkasse AG, based on a wrong calculation. „We think that the decision was unjustified because the meetings at the time didn't cause any harm to consumers,” Erste Bank spokesman Michael Mauritz said by telephone today. The bank is appealing against the EU decision and the fine, he said. Raiffeisen Zentralbank Oesterreich AG, which was fined €30.4 million, filed an appeal March 6, and Erste Bank's appeal arrived March 2, the EU court in Luxembourg said today. Bank Austria filed its appeal at the EU court this week, spokesman Peter Thier said in a telephone interview. Walter Groeblinger, a spokesman at Oesterreichische Volksbanken AG, another bank in the case, didn't return a voice message left on his mobile phone. Raiffeisen Zentralbank spokesman Andreas Ecker-Nakamura didn't immediately return a call seeking comment.

The regulator, which can fine antitrust offenders as much as 10% of annual sales, gave Erste Bank the largest penalty of €38 million, followed by €30.4 million for Bank Austria. The cartel, lasting from at least 1994 to June 1998, was „one of the most shocking” it had discovered, the commission said. Oesterreichische Postsparkasse, which merged with Bank fuer Arbeit und Wirtschaft AG, won't appeal further after the lower court reduced its fine December 14, Bawag PSK Bank spokesman Thomas Heimhofer said today. Both banks originally were fined €7.6 million each. The European Court of First Instance cut the Oesterreichische Postsparkasse fine to €3.8 million. The cartel was „highly institutionalized” and consisted of committees covering every banking product, allowing its members to agree in regular meetings on prices, including lending and deposit rates, the commission said. The case number already published is C-125/07 Pending Case, Erste Bank der Oesterreichischen Sparkassen v Commission. (Bloomberg)