Attention officials at the Department of Natural Resources and Newfoundland and Labrador Hydro - please take note:
From Oilweek Magazine:
European Union fines 10 companies US$978 million for power gear cartel (EU-Energy-Gear-Cartel)
BRUSSELS(AP) _ EU regulators fined 10 companies a combined US$978 million on Wednesday for running a cartel to fix prices for heavy equipment used by power utilities, with Siemens AG ordered to pay more than half the total.
Several of the other companies penalized in what the EU called the largest set of fines on a single cartel were Japanese businesses that struck a deal to stay out of Europe, while the Europeans steered clear of Japan‘s market.
The European Commission said the companies rigged bids for contracts to supply power plants, fixed prices, shared projects between themselves, carved up markets and exchanged commercially important and confidential information from 1988 and 2004.
It increased Siemens‘ fine by half to 396.5 million euros ($517 million) _ making this the second-highest cartel fine it has ever levied _ because the company played a leadership role in fixing prices.
Siemens immediately said it would appeal the “exaggerated‘‘ fine, claiming the EU had made a “blanket accusation‘‘ when price-fixing had occurred only in isolated cases.
But EU spokesman Jonathan Todd said regulators were “extremely sure‘‘ their decision was legal.
Japan‘s Mitsubishi Electric Corp. had the next biggest fine of 118.5 million euros ($154.5 million), followed by Toshiba Corp.‘s 90.9 million euros ($118.5 million).
Mitsubishi said it was considering its response, while Toshiba denied any wrongdoing. “Our own investigations show that we have not engaged in any actions that violate European competition laws, and we plan to fight this decision in European courts,‘‘ Toshiba said in a statement.
France‘s Alstom SA must pay 65 million euros ($84.7 million). Areva was fined 53.5 million euros ($69.7 million) for the actions of a subsidiary it bought from Alstom just four months before investigators launched surprise raids. Both fines were increased by 50 per cent for the companies helping organize the cartel.
Hitachi Ltd. must pay 51.75 million euros ($67.5 million). It had no immediate comment.
Siemens is also responsible for its Austrian unit VA Technologie AG‘s 22-million-euro ($28.7-million) fine. It bought the company after the end of the cartel.
The commission said the parent company was responsible for the fine if it had “decisive influence over commercial behaviour of its subsidiaries.‘‘
Schneider Electric SA must pay 8.1 million euros ($10.56 million), Fuji Electric Holdings Co. Ltd. must pay 3.75 million euros ($4.9 million) and Japan AE Power Systems _ a joint venture between Fuji, Hitachi and Meidensha Corp. _ was fined 1.35 million euros ($1.76 million).
“These companies accounted for virtually all the supply of these products on the European market,‘‘ said Todd.
“The commission regards this cartel as totally unacceptable behaviour on behalf of the companies concerned and we sincerely hope that companies will see the large fines imposed as what awaits them if they were inclined to follow this bad example,‘‘ he said.
The basic fines are calculated on the companies‘ share of the European market but the Japanese fines were based on total worldwide turnover.
ABB Ltd. received full immunity for blowing the whistle, escaping a potential 215-million-euro fine. The Swiss-Swedish electrical engineering company said in 2004 that it discovered price-fixing during an internal audit and had dismissed two managers.
“The commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years,‘‘ EU competition commissioner Neelie Kroes said.
The companies all handled gas-insulated switchgear, heavy electrical equipment used to control energy flows in electricity grids that is an important part of auxiliary power stations where electrical current is converted from high to low voltage or the reverse.
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 company to get a certain quota of contracts or keep to a minimum bidding price. The deal to keep Japanese companies out of Europe ultimately hurt European consumers, the commission said, fining several Japanese companies even though they sold no power gear in Europe.
Officials said management met regularly to discuss strategic issues while lower-level executives divided projects and prepared sham bids by companies who were not supposed to win the tender “in order to leave an impression of genuine competition.‘‘
The cartel tried very hard to cover its traces, using code names for rival companies and communicating via anonymous and encrypted e-mail, the commission said. It published a message from one unidentified cartel organizer to another, forbidding e-mail from home and company computers and urging the use of anonymous e-mail addresses.
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Please try to stay all over this - okay....And watch the communications sector as well...
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