EU Fines European and Asian Power Cable Companies for Cartel
The European Union’s (EU) executive said that a group of European, Japanese and Korean power cable producers has been collectively fined more than €300m (US$414m) for illegally dividing up operation areas among themselves.
“These companies knew very well that what they were doing was illegal,” said EU competition commissioner, Joaquin Almunia. “This is why they acted cautiously and with great secrecy.
“Utilities and governments were deprived of the genuine possibility to choose between different providers when planning important energy infrastructure projects. Cartels make markets less efficient and stifle innovation.”
The largest single fine, of €104.6m, was imposed on Prysmian, a worldwide company headquartered in Italy. Almunia said that US financial group Goldman Sachs is liable for €37.3m of the penalty as it previously owned Prysmian and was directly involved in management decisions.
“Investment companies … should take a careful look at the compliance culture of the companies they invest in,” he added.
Substantial penalties were also levied on French company Nexans (€70.7m) and Japanese companies VISCAS and J-Power Systems, fined nearly €35m and €20.7m respectively.
Switzerland’s ABB escaped a fine of €33m for having blown the whistle on the cartel, while other companies had their fines reduced for cooperating with the EU’s investigation.
The 11 producers involved in the underground and submarine cable cartel between 1999 to 2009 included “most of the world’s largest high-voltage power cable producers,” said the European Commission (EC). “Part of (their) plan was to allocate important high-voltage power cable projects in the European Economic Area (EEA), including large infrastructure and renewable energy projects such as offshore wind farms.
The producers agreed to ‘stay out of each other’s home territories’, while dividing projects in the rest of the world. They would rig bids to make sure a particular company would be chosen, according to the commission.
Separately, the EU’s executive fined three producers of steel abrasives – used by industry to clean metal and cut hard stone – a total of €30.7m in a settlement to end an investigation into price-fixing.
The companies involved in the six-year cartel were the US-UK firm Ervin, France’s Winoa, and the German firms Metalltechnik Schmidt and Eisenwerk Wuerth. Ervin escaped a fine by revealing the arrangement.