European Commission Fines Cabling Cartel with USD 416 Mln

The European Commission has found that 11 producers of underground and submarine high voltage power cables operated a cartel, and has imposed fines totalling $ 416 million ( €301 million ).

Such cables are typically used to connect generation capacity to the electricity grid or to interconnect power grids in different countries.

The investigation revealed that from 1999 to the inspections carried out by the Commission in January 2009, these producers entered into mutual agreements according to which the European and Asian producers would stay out of each other’s home territories and most of the rest of the world would be divided amongst them. In implementing these agreements, the cartel participants allocated projects between themselves according to the geographic region or customer. In particular, the European companies agreed to allocate projects within the European Economic Area (EEA).

The evidence in the Commission’s file shows that these agreements were in place for almost ten years. In internal communications the cartelists referred to themselves as the “R”, “A” and “K” companies, meaning European, Japanese and Korean companies.

Most of the world´s largest high voltage power cable producers, namely ABB, Nexans, Prysmian (previously Pirelli), J-Power Systems (previously Sumitomo Electric and Hitachi Metals), VISCAS (previously Furukawa Electric and Fujikura), EXSYM (previously SWCC Showa and Mitsubishi Cable), Brugg, NKT, Silec (previously Safran), LS Cable and Taihan, participated in the illegal agreements.

Six European, three Japanese and two Korean producers of submarine or underground power cables were involved in the cartel. Several companies that took part in the infringement and later merged their activities into joint ventures are also held liable, as well as parent companies of the producers involved, because they exercised a decisive influence over them.

Commission Vice President in charge of competition policy Joaquín Almunia, said: “These companies knew very well that what they were doing was illegal. This is why they acted cautiously and with great secrecy. Despite this and through joint efforts by several competition authorities around the world, we have detected their anti-competitive agreements and brought them to an end.”

ABB received full immunity from fines under the Commission’s 2006 Leniency Notice as it was the first to reveal the cartel to the Commission.

Press Release, April 02, 2014

 

 

 

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