Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC imposes €68 million fine on parking heater producer in cartel settlement, (Jun 17, 2015)

By Linda O’Brien, J.D., LL.M.

The European Commission (EC) determined that two German producers of automotive parts, Eberspächer and Webasto, breached European Union (EU) antitrust rules prohibiting cartels and restrictive business practices by coordinating prices and allocating customers with regards to fuel-operated parking heaters and auxiliary heaters. As a result, the Commission imposed a fine of € 68 175 000 on Eberspächer for its involvement in the cartel, the EC announced today.

The fine was reduced under the Commission's leniency program to reflect Eberspächer's cooperation with the investigation. Webasto was not fined, since the company benefited from immunity for revealing the existence of the cartel to the Commission. Both companies agreed to settle the case with the Commission.

Parking heaters are used widely in modern cars and trucks. Fuel-operated parking heaters heat a parked car and truck or pre-warm its engine. Fuel-operated auxiliary heaters support the heating system of cars and trucks with modern and highly efficient engines that do not produce enough waste heat to keep a running car or truck warm. Webasto and Eberspächer are the only suppliers of fuel-operated parking heaters and fuel-operated auxiliary heaters for cars and trucks in the European Economic Area (EEA).

The Commission's investigation started with an unannounced inspection at Eberspächer's premises in July 2013. It showed that over a period of 10 years, from September 2001 until September 2011, Webasto and Eberspächer coordinated prices and allocated customers in the entire EEA. When the companies received requests for price quotations from car or truck manufacturers, they discussed various price elements, agreed which of the two would submit the winning lower bid, and exchanged other commercially sensitive information. The two companies also colluded when selling to dealers in Germany and Austria, by harmonizing their annual price lists and the discounts they would give to these dealers.

The fines were set on the basis of the EC’s 2006 Guidelines on fines. In setting the level of fines, the Commission took into account the companies' sales of the products concerned in the EEA, the serious nature of the infringement, its geographic scope, and its duration.

Webasto received full immunity for revealing the existence of the cartel and thereby avoided a fine of € 222 247 000 for its participation in the infringement. Eberspächer benefited from reductions of its fine under the 2006 Leniency Notice for its cooperation. The reduction reflects the timing of its cooperation and the extent to which the evidence it provided helped the Commission to prove the existence of the cartel. Eberspächer's fine was further reduced by 10 percent, as the company agreed to settle the case with the Commission.

"For over ten years, the only two suppliers of parking heaters in Europe colluded to avoid competing with each other,” said Margrethe Vestager, Commissioner in charge of competition policy. “This cozy 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."

Companies: Eberspächer; Webasto

News: Antitrust