Nippon Steel Corp., Sumitomo Metal Industries Ltd. and two other steelmakers failed in their bid to get fines for fixing prices of seamless steel reduced by the European Union's highest court.
The European Commission fined eight companies a total of €99 million ($127.9 million) in 1999 after investigations found they colluded in a cartel for seamless steel tubes used in the oil and gas industry. A lower EU court cut the total fine by €12.8 million, finding the commission had failed to prove illegal behavior for the entire five years that the cartel lasted. Four of the companies, including Salzgitter AG's Salzgitter Mannesmann and Italian pipemaker Dalmine SpA, now part of Tenaris SA, filed an appeal to the European Court of Justice in Luxembourg seeking an additional reduction of the fines. The Court of Justice today ruled that the lower EU court „did not err in law” when it said that the companies' cartel had an „appreciable effect” on EU trade. The commission called the companies' actions „a very serious breach” and levied what was at the time the fifth-largest penalty for a cartel.
Salzgitter is disappointed with the ruling, company spokeswoman Regine Schlump said in a telephone interview. „The company's 2006 earnings won't be affected because we made provisions in case of such a ruling,” she said. Stefania Argento, a spokeswoman for Dalmine wasn't immediately able to comment when reached by telephone. Nippon and Sumitomo couldn't be reached by telephone after business hours in Japan. The commission today said it welcomed the ruling. The commission yesterday levied the second-largest EU cartel fines of €750.7 million on Siemens AG, Areva SA and eight other companies for colluding to fix prices of gas-insulated switchgear used to control electricity flow.
It confirmed its decision that the companies had participated in this illegal market-sharing cartel. Nippon, the world's second-largest steelmaker, Salzgitter and Sumitomo each were fined €13.5 million. The European Court of First Instance, the second-highest EU court, in 2004 cut Nippon's and Sumitomo's original fines to €10.9 million each, while Salzgitter's was cut to €12.6 million euros. Dalmine received a €720,000 reduction to 10.1 million. An adviser to the Court of Justice in a non-binding opinion in September said the companies' fines should be upheld as given by the lower court. (Bloomberg)