Brussels - The European Commission on Wednesday imposed a 67.6-million-euro fine (99.5-million-dollar) on French, Swiss and Japanese producers of power transformers for forming a market-fixing cartel. Germany's Siemens also participated in the illegal agreement but was granted immunity for revealing the existence of the cartel to the European Union's executive. The biggest single fine - 33.75 million euros - was slapped on Switzerland's ABB, which had already been fined by the commission for participating in another cartel.
The other companies involved in Wednesday's action are ALSTOM SA and AREVA T&D SA of France and Fuji Electrics, Hitachi and Toshiba of Japan.
ABB and Hitachi both said they would review the commission's decision ahead of a possible appeal in the European courts. Siemens said in February that it had already fired its managers responsible for taking part in the cartel.
According to the commission's investigation, top managers from the companies involved met secretly in luxury hotels in Malaga, Singapore, Barcelona, Lisbon, Tokyo, Vienna or Zurich to reaffirm a "Gentlemen's Agreement."
This agreement, in place between 1999 and 2003, saw the cartel's Japanese members refrain from selling their products in Europe. In return, the European companies would not sell their power transformers in Japan, to the detriment of consumers in both markets.
"Customers and tax payers all over Europe suffered from this cartel for a number of years. The Ccmmission has now put an end to this rip-off by the self-appointed 'Gentlemen'," said European Commissioner for Competition Neelie Kroes.
"The commission will not hesitate to increase fines for repeat offenders until they have learned the lesson that cartels do not pay," Kroes added.
The market for the power transformers in question are used to modify the voltage in electricity transmission networks.
At the time of the infringement, the parties' combined annual sales in the European Economic Area (EEA) were estimated to be worth around 100 million euros.
EU rules prohibit agreements and concerted practices between firms that distort competition within the bloc's single market.
The commission can impose fines of up to 10 per cent of the guilty parties' worldwide turnover, with proceeds paid into the EU's common budget.
