EU fines firms for price fixing

Siemens and 10 others rigged bids, fixed prices and cheated consumers.

    The European Commission said companies rigged bids and fixed prices [EPA]

    Siemens was told to pay $543 million, the biggest fine EU regulators have ever slapped on a single company, for participating in a cartel.

     

    Siemens denial

     

    Siemens has denied the charges and said it would appeal to the European Court of Justice. 

     

    "We consider the fines to be completely exaggerated and cannot understand them at all," said Udo Niehage, the chairman of Siemens power transmissions and distribution unit.

     

    EU imposed $514 million in fines against the German headquarters of Siemens and $28.6 million against Siemens Austria. 

     

    A total of 11 companies were taxed by the EU a total of $978 million. The companies are: Alstom SA, Areva, Fuji, Hitachi Japan, AE Power Systems, Mitsubishi Electric Corp, Schneider Electric SA, Siemens, Toshiba Corp and VA Technologie AG, which is now owned by Siemens.  

     

    Meanwhile ABB Ltd received full immunity for blowing the whistle on the powerful cartel.

     

    "The commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years," said Neelie Kroes, the EU competition commissioner.

     

    The companies all handled gas-insulated switchgear and heavy electrical equipment used to control energy flows in electricity grids. 

     

    The equipment is usually sold to utilities at public tenders where companies pitch bids and the lowest is chosen.

     

    Regulators said the suppliers co-ordinated their bids to allow each firm get a certain quota of contracts or keep to a minimum bidding price.

     

    The cartel agreed that Japanese companies would not sell in Europe and European companies would not sell in Japan.

     

    This ultimately hurt European consumers, the European commission said, fining several Japanese companies.

    SOURCE: Agencies


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