European authorities fined Siemens AG, Areva SA, Alstom SA, Schneider Electric SA and six competitors €750.7 mln ($977 million) for fixing prices of electricity transmission gear. The companies were found to have shared markets in the gas-insulated switchgear market involving projects in Hungary.
Siemens, Europe's largest engineering company, received the biggest fine of €396.6 million, the European Commission, the EU's Brussels-based antitrust regulator, said in a statement. „The commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years,” Competition Commissioner Neelie Kroes said in the statement today. The fine is the second-highest imposed by the commission in a cartel case, following a record €790.5 million for fixing vitamin prices in 2001. The companies have a right to appeal the decision to the European Court of First Instance in Luxembourg. The agency also fined Rueil-Malmaison, France-based Schneider Electric €8.1 million, Japan's Hitachi Ltd. €51.8 million and Mitsubishi Electric Corp. €118.6 million, Toshiba Corp. €90.9 million and Austria's VA Technologie AG, which Siemens bought in 2005, €22 million.
Munich-based Siemens said in a statement that it plans to appeal the fine at an EU court, calling the penalties „completely exaggerated.” Spokesmen Stephane Farhi at Alstom and Julien Duperray at Areva said they had no immediate comment, as did Schneider Electric spokeswoman Veronique Moine. Kroes has made fighting cartels a priority in her five-year term. The commission fined seven companies a record €1.84 billion last year. „The commission has once more shown that it will not tolerate cartels in Europe and the damage that they do in any area of business,” Kroes said in the statement. ABB Ltd., the world's largest builder of electricity networks, tipped off the EU and wasn't fined. The company escaped a €215.2 million fine, the commission said. The investigation began when European and national antitrust officials conducted surprise inspections of companies' premises on May 11 and 12, 2004.
The probe focuses on the market for gas-insulated high-tension electric switchgear, used to control flow in electricity grids. Customers include state-owned public utilities, municipalities and private companies. The commission sent official charge sheets to companies in May 2006. Siemens denied the „blanket accusation” that it participated in a cartel for 72 KV switchgear between 1988 and 2004. „Price fixing in the GIS segment took place only in a few projects in the European economic area and only in the period between October 2002 and April 2004,” the company said. Siemens completed the purchase of VA Technologie in September 2005 for €728.5 million.
An Areva spokesman, who didn't want to be identified, said the Paris-based company bought the transmission and distribution division in January 2004 from Alstom. The EU told Areva that it was under investigation four months later. During takeover negotiations, there was no mention of the alleged cartel, he said. The commission fined Areva €53.6 million. „For most of the duration of the infringement, a former Alstom subsidiary, bought by Areva four months before the end of the cartel, is jointly and severally liable with Alstom for the infringement,” the commission said. If the price-fixing fine covered a period when Areva wasn't the owner, Areva reserves the right to sue Alstom, the spokesman said. The EU levied a €65 million fine against Alstom.
„It was ABB's disclosure to the European Commission in 2004 of the anti-competitive practices in the high-voltage gas insulated switchgear business that led to the Commission's investigation,” the company said in a statement. „ABB has been cooperating fully with the Commission's investigation.” Czech and Hungarian authorities also probed the cartel. Czech regulators said January 8 that they sent statements of objections to unidentified companies last month. On December 23, 2005, the Hungarian Competition Authority fined Alstom, Siemens, VA Tech T&D GmbH and two Areva units Ft 702 million ($3.7 million) for committing a „serious infringement” of competition law. The companies were found to have shared markets in the gas-insulated switchgear market involving projects in Hungary, the authority said. The worldwide cartel began in 1988 and lasted until 2004, the commission said. (Bloomberg)