Seven companies- ABB, AREVA T&D SA, Siemens, Toshiba, Hitachi, Fuji electrics and ALSTOM SA, have been fined 67.6 Million Euros (around 460 Crores in INR) for operating a market sharing cartel selling transformers in the European Economic Area and Japan. The cartel was in operation from around June, 1999 to May, 2003. The companies involved met once or twice in a year in either Asia or Europe, used code names and went to great lengths to hide their illegal actions.
Siemens was granted immunity from the fine under the leniency programme, which was introduced since it was very difficult to gather evidence on cartels without insider support. Under a similar provision on the Competition Act in India, any participant in a cartel who comes forth before investigations are complete and offers full and unconditional cooperation can be exempted from fines.
The cartel is reminiscent of the Lysine cartel which was exposed by the FBI and subsequently had to pay a huge fine apart from federal prison terms for top officials of Archer Daniels Midland. The company also had to settle a class action lawsuit later. The transformers cartel may also face lawsuits from victims of the cartel in national courts and the EC's fine is not inclusive of potential fines that former members of the cartel might incur or payments they might have to make in these lawsuits. For more information see: EC Press Release
Siemens was granted immunity from the fine under the leniency programme, which was introduced since it was very difficult to gather evidence on cartels without insider support. Under a similar provision on the Competition Act in India, any participant in a cartel who comes forth before investigations are complete and offers full and unconditional cooperation can be exempted from fines.
The cartel is reminiscent of the Lysine cartel which was exposed by the FBI and subsequently had to pay a huge fine apart from federal prison terms for top officials of Archer Daniels Midland. The company also had to settle a class action lawsuit later. The transformers cartel may also face lawsuits from victims of the cartel in national courts and the EC's fine is not inclusive of potential fines that former members of the cartel might incur or payments they might have to make in these lawsuits. For more information see: EC Press Release
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