Brussels, 22/12/2000 (Agence Europe) - The European Commission inflicted a heavy fine on the British group JC Bamford (JCB), a major manufacturer of equipment for the construction, agriculture and industry sectors, for infringement on Community law covering agreements. The Commission investigation, carried out following a complaint by the French distributor Central Parts SA in February 1996, showed that JCB established distribution agreements and other practices having as effect to noticeably restrict the sales of its products outside the conceded territories, be it inside certain national borders or abroad, as well as interfering with the freedom to set resale prices.
The sector affected by these practices is that for construction and earthmoving machines, whose turnover totals some EUR 7.8 billion per year in Europe and in which JCB competes with 13% of the sales made in the EU. However, the JCB share with regards to its key product, backhoe loader, in Europe is of around 45%.
During surprise inspection in November 1996, the Commission found proof of the existence of illegal agreements made by various JCB companies, notably JCB Sales organisation (UK), JCB SA (France) and JCB Spa (Italy) that are all controlled by JCB Service. From these elements it becomes clear that these agreement or illegal practices have been implemented, in isolation or in conjunction, from 1988 to 1998. These practises specifically consist of: i) the enforcement of limits for the sales that can be made outside the allocated territory; ii) the application of restrictions concerning the acquisition of machines between certified distributors from different Member States; iii) the implementation of bonus systems and commissions to the detriment of sales made outside the territory. It is proven that these restrictions have been established, at least in the United Kingdom, in France, in Italy and in Ireland. The Commission asked JCB to lift the measures cited above and to bring its practices and agreements in liner with Community rules. The infringements have been judged extremely serious: given that they concern long-term infringements and the JCB imposed financial sanctions on a distributors that did not conform with the restrictive agreements - which constitutes a aggravating circumstance - the fine has been set at EUR 39.6 million.