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New developments regarding the high voltage power cable cartel
Memos are sometimes very useful. This holds true also for the case of the high voltage power cable cartel. On 02/04/2014, the EU Commission imposed fines on European as well as Japanese and Korean producers of high voltage power cables. Even though quite some time has passed since this decision was adopted, the case is still relevant for potential victims.
Why? Frist, the Commission recently published the grounds for its decision including some interesting details. Secondly, appeals against this decision are still pending before the European Court. Judgments in these proceedings are expected to be passed already in spring 2018. If those rulings become final, the Commission’s finding that antitrust law has been infringed upon will also become binding, which in turn will form the basis for cartel damages claims. But let us start at the beginning.
As it is often the case, the reason for the European Commission becoming aware of the cartel was that one of the companies involved (in this case: ABB) revealed the existence of the anti-competitive agreements to the Commission within the leniency programme. While ABB went unpunished, the Commission imposed fines totalling approx. €302 million on other producers of high voltage power cables and, in some instances, also on their parent companies. However, the fact that ABB has not been fined does not mean that the company will not incur any consequences under civil law.
The European Commission’s investigation revealed that most of the world’s largest high voltage power cable producers participated in the cartel – which operated from 1999 to January 2009 – even though for different lengths of time. These producers entered into mutual agreements according to which they would not compete in each other’s home territories and would divide most of the rest of the world’s market amongst themselves. In addition, the European producers had agreed to allocate projects amongst themselves within the European Economic Area (EEA). According to the Commission’s findings, the subject matter of this collusion were underground power cables of at least 110 kV and submarine power cables of at least 33 kV as well as any products, works and services sold to the customers related to a sale of power cables when such sales are part of a power cable project.
What does this mean for the cartel victims?
Companies which in the time period from 1999 to 2009 commissioned cable producers involved in the cartel with the installation of a high voltage underground or submarine power cables may have been victims of the cartel. This is because, in most cases, cartel agreements lead to excessive prices as they eliminate fair competition. Default interest also taken into account, the potential damage can quickly reach six-digit amounts.
Particularly against the background of the now available, comprehensive grounds for the decision (approx. 300 pages), it may be worth checking whether one was affected by the cartel and examine the statutory limitation period. This will help assess whether potential claims for damages are likely to be successful.