European Union regulators plan to fine four of the world's biggest elevator makers at least €900 mln ($1.2 bln) for price-fixing, said a person with knowledge of the penalty.
United Technologies Corp.'s Otis unit, the world's largest elevator maker, Schindler Holding AG, ThyssenKrupp AG and Kone Oyj will be penalized, said the person, who declined to be identified because the decision isn't public. About half of the fine will be against ThyssenKrupp, the person said. The fine, due to be announced as early as February 21, would be the largest ever by the European Commission, exceeding a €790.5 million penalty levied against a vitamin cartel in 2001. European Competition Commissioner Neelie Kroes has made busting cartels her top priority since she took over from Mario Monti in November 2004. „Nobody expected such a high fine and it will have an effect on the companies,” said Christian Obst, an analyst at HVB in Munich with a „hold” rating on ThyssenKrupp AG. „The message is there needs to be more competition in the market.” The commission, the EU's antitrust regulator in Brussels, alleges a price-fixing cartel took place in Belgium, Germany, Luxembourg and the Netherlands between 1998 and 2004. Jonathan Todd, a commission spokesman, declined to comment yesterday. The EU regulator will fine the four companies as much as €1 billion, Agence France-Presse reported earlier today, citing people close to the matter.
„This could affect the future profitability of elevator companies, which have historically had high margins and charged high prices,” Obst said. Obst estimates that the elevator market this year will generate profits of at least €3 billion and some estimates are as high as €3.6 billion, he said. „These are just rumors,” Minna Mars, a spokeswoman for Kone, said by e-mail. „As soon as we hear from the commission about their decision we will issue a stock exchange release.” Ivo Zimmermann, a spokesman for Hergiswil, Switzerland-based Schindler, said the company doesn't comment on speculation. „We have been fully cooperative with the European Commission,” Zimmermann said in an interview. „We are waiting for a decision. We don't know when it will be announced.” „We have been cooperating with the EU,” Monica Soffritti, a spokeswoman at Dusseldorf, Germany-based ThyssenKrupp, said by telephone. „There is nothing new from our side.” United Technologies spokesman Peter Murphy said the company doesn't comment on speculation. Elizabeth Young, a spokeswoman for Farmington, Connecticut-based Otis, didn't immediately respond to messages left by Bloomberg on her office and mobile phones. The companies have a right to appeal the decision to the European Court of First Instance in Luxembourg. (Bloomberg)