ABB fined for 'gentleman's cartel'
BRUSSELS (AFP) – Swedish-Swiss engineering group ABB was fined 33.75 million euros by the EU for its part in a "gentleman's" cartel.
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The EU has fined seven big companies nearly a 100 million dollars for running a carve-up in the power generation industry through a "gentleman's" cartel in "swanky hotels," Brussels said on Wednesday.
Penalties totalling almost 68 million euros (98 million dollars) were spread out between seven companies -- ABB, Areva T&D;, Alstom, Fuji Electrics, Hitachi and Toshiba -- the European Commission said.
The worst offendor, Swedish-Swiss ABB, saw its fine increased by 50 percent to 33.75 million euros because it had previously taken part in a similar infringement, a statement explained.
Alstom and Areva must pay 16.5 million euros, with Japan's Toshiba hit with 13.2 million, Hitachi ordered to pay 2.46 million euros and Fuji Electrics told to shell out 1.734 million euros.
"The European companies agreed not to sell in Japan and the Japanese companies agreed not to sell in Europe," said a statement. "The cartel was organised through an oral 'gentlemen's agreement.'
"These self-appointed 'gentlemen' met in swanky hotels throughout Asia and Europe, from Singapore to Barcelona, Zurich to Tokyo, and Vienna to Lisbon, to carve up the European and Japanese markets between themselves."
Siemens also participated but was not fined because it revealed the existence of the cartel in question to the commission.
Power transformers are used to control the voltage in electricity transmission networks.
"Customers and taxpayers all over Europe suffered from this cartel for a number of years," said EU competition commissioner Neelie Kroes.
"The commission has now put an end to this rip-off by the self-appointed 'gentlemen.'
"The commission will not hesitate to increase fines for repeat offenders until they have learned the lesson that cartels do not pay."
The 'seven dwarves' was a term originally used to refer to tobacco companies in the United States that denied evidence that smoking was harmful to health.
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Last Updated (Wednesday, 07 October 2009 14:32)
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