European Commission settles with parking heater producer in cartel investigation
Author: Sarah Livestro
Applies to: European Union
The European Commission ('the Commission') has announced that it had used its fast track settlement procedures to investigate and impose fines in respect of a parking heater cartel.
The Commission found that two German producers of automotive parts, Eberspächer and Webasto, had participated in a long running cartel that fixed prices and shared out customers for fuel-operated parking heaters.
The cartel came to light after one of the companies, Webasto, 'blew the whistle' on the arrangements and disclosed the cartel's existence to the commission. Following dawn raids and an investigation, the Commission fined Eberspächer just over 68 million (EUR). The Commission indicated that it would have fined Webasto just over 222 million (EUR) but, as the whistle blower, it escaped being fined altogether.
This case is the latest example of the European Commission's settlement procedure being put into action. Companies that are accused of breaking EU competition law may choose to engage in settlement discussions with the Commission, in return for a reduced financial penalty. Under the procedure, a company must admit liability for the infringement alleged by the Commission, including the scope and duration of the breach. This admission enables the Commission to issue a 'streamlined' decision and entitles the settling party to a 10% reduction in the level of its fine, in addition to any other discounts the commission might apply. While this reduction is lower than that enjoyed by a company that 'blows the whistle' on a cartel, a reduction of this size may still represent a significant incentive to co-operate, particularly where fines are likely to be high.
Here, both companies agreed to settle the case with the Commission. Eberspächer's fine was therefore reduced by 10% in addition to further discounts it received for co-operating with the investigation.
Commissioner Margrethe Vestager in charge of competition policy said: 'For over ten years, the only two suppliers of parking heaters in Europe colluded to avoid competing with each other. This cosy arrangement adversely affected a major part of the European automotive industry and ultimately those who buy cars and trucks. Today's decision is a clear signal to companies colluding - or thinking about it - that a cartel will be found out, no matter how few the participants.'
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.