EU FINES CABLE COMPANIES €302m

almuniaOn 2 April 2014, the Commission announced the imposition of fines totalling €301,639, 000 on 11 producers of high voltage power cables that it alleged had operated a cartel. The companies concerned included 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. 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.

The cartel operated for a decade from 1999-2009 and according to the Commission, the participants openly weighed up the risk of being caught running a cartel against the potential profits that would result, as well as making extensive efforts to delete incriminating documents.

In general terms the companies allocated bids between them, agreeing price levels in advance to ensure that a designated supplier would offer the lowest price. The Japanese and Korean members of the cartel agreed not to bid against their European counterparts whenever they received requests from European customers. The members of the cartel regularly met in hotels in Europe and South-East Asia, sending e-mails and faxes to reach agreements. The participants divided up the world into regions and agreed to stay out of one another’s home territories.

Of particular note is the €37.3m fine announced on Goldman Sachs for its role as a former owner of Prysmian. According to the Commission, it is sufficient for an investment company to have a “decisive influence” over the commercial policy of the investee company to attract liability.

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.”

This entry was posted in Europe, Leniency by Michael O'Kane. Bookmark the permalink.

About Michael O'Kane

Michael O’Kane is a partner and Head of the Business Crime team at leading UK firm Peters & Peters. Described as ‘first-rate’ (Legal 500 2012), he “draws glowing praise from commentators” (Chambers 2013) for handling the international aspects of business crime, including sanctions, extradition and mutual legal assistance. Called to the Bar in 1992 and prior to joining Peters & Peters he was a senior specialist prosecutor at the Crown Prosecution Service Headquarters(CPS). At CPS HQ he was a key member of a small specialist unit responsible for the prosecution of serious and high profile fraud, terrorist and special interest criminal matters including the Stansted Airport Afghan hijacking and the prosecution of Paul Burrell (Princess Diana’s butler). Michael joined Peters & Peters in 2002. He became a partner in May 2004, and Head of the Business Crime team in May 2009. Since joining Peters & Peters, Michael has dealt with a wide range of business crime matters. He has particular expertise in international sanctions, criminal cartels, extradition, corruption, mutual legal assistance, and FSA investigations. Described as“ an influential practitioner in fraud and regulatory work, so much so that he is top of the referral lists of many City firms for independent advice for directors” (The Lawyer’s Hot 100 2009), he was recognised as one of the UK’s most innovative lawyers in the 2011 FT Innovative Lawyer Awards and included in the list of the UK's leading lawyers in 'The International Who's Who of Asset Recovery 2012. In 2012 he was the winner of the Global Competition Review Article of the Year. Michael regularly appears on television and radio to discuss his specialist areas and he is the author of the leading textbook on the UK Criminal Cartel Offence “The Law of Criminal Cartels-Practice and Procedure” (Oxford University Press 2009). Recent/Current Sanctions Work • Representing 109 individuals and 12 companies subject to designation by the European Council under targeted measures imposed against Zimbabwe. This is the largest and most complex collective challenge to a sanctions listing ever brought before the European Court. • Acting for a former Egyptian Minister and his UK resident wife, challenging their designation by the European Council of Ministers under targeted measures brought against former members of the Egyptian Government. • Advising a company accused in a UN investigation report to have breached UN sanctions imposed in relation to Somalia. • Advising a UK company in relation to ongoing commercial relationships with an Iranian company listed under both EU and UN sanctions. • Advising an individual in relation to a UK investigation for alleging breaching nuclear export controls.

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