Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC imposes fines of €138 million for alternator, starter cartel, (Jan 27, 2016)

By Michael Menzhuber, J.D., LL.M.

The European Commission (EC) imposed fines of €110,929,000 on Melco (Mitsubishi Electric) and €26,860,000 on Hitachi for breaching European antitrust rules by participating in a cartel for alternators and starters with Denso, the EC announced today.

For more than five years, the three Japanese car parts manufacturers coordinated prices and allocated customers and projects with regards to alternators and starters. Despite the fact that contacts associated with forming and running the cartel took place outside the European Economic Area (EEA), European customers were affected because the alternators and starters were sold directly to manufacturers in the EEA.

The EC’s investigation, which started with an immunity application submitted by Denso, revealed that between September 2004 and February 2010 the companies met and were in contact over the phone on a regular basis in order to limit competition between them. In particular, the three companies: (1) coordinated their responses to certain calls for tenders issued by car manufacturers with respect to determining the price as which they would tender and who should win specific business; (2) allocated certain vehicle manufacturers and projects in terms of which company would supply alternators and starters; and (3) exchanged commercially sensitive information such as price elements and market strategies.

Denso received full immunity for revealing the existence of the cartel to the EC, thereby avoiding a fine of more than €157 million. Melco and Hitachi each received reductions on their fines under the EC’s 2006 Leniency Notice, 28 percent and 30 percent respectively, for their cooperation with the investigation. They each received a 10 percent reduction under the EC’s 2008 Settlement Notice in view of their acknowledgment of their participation in the cartel and of their liability in this respect.

The fines were set on the basis of the EC’s 2006 Guidelines on fines. In setting the level of fines, the EC took into account: (1) the companies’ sales generated from the supply of alternators and starters to car manufacturers affected by the cartel in the EEA; (2) the serious nature of the infringement; (3) the geographic scope and duration; (4) the aggravating circumstances that Hitachi and Melco had both previously broken EU antitrust rules; and (5) Hitachi’s lesser involvement in the infringement.

Companies: Denso; Hitachi; Melco (Mitsubishi Electric)

News: Antitrust