Brussels, 24/06/2008 (Agence Europe) - The European Commission announced on Tuesday 24 June that it intended to seek compensation from the companies which, between 1995-2004, supplied it with lifts when they were involved in a cartel which was later uncovered and sanctioned by the Commission. The Commission “is showing an example that it would hope will encourage others to follow,” said Jonathan Todd, the spokesman for Competition Commissioner Neelie Kroes.
The Commission wants, in addition to fines imposed by Community authorities, to see more private actions against those involved in cartels, and this for two reasons according to the spokesman. Firstly, no matter how hefty the sanctions, they do nothing for those who have suffered from excessively high prices as a result of the cartel, and, secondly, private actions “act as an additional deterrent on companies that may be tempted to indulge in cheating”.
Here, the Commission is acting simply in the role of an organisation that believes it paid too much for its lifts and escalators. Over the period of the cartel, it paid €19 million for material, installation and maintenance costs to suppliers Schindler, Otis, KONE and ThyssenKrupp. It will be for specialists to assess the exact amount of overpayment that resulted from the actions of the cartel, but a spokeswoman for the Commission pointed to an OECD report which claims that cartel activity raises prices artificially by 20-30% on average, and sometimes as high as 50%.
The four companies were fined a total of €992 million in February of last year for taking part in a cartel in Belgium, Germany, Luxembourg and the Netherlands from 1995 and for at least nine years (see EUROPE 9371). These fines were imposed by the Commission in its capacity as guardian of the treaties and under the rules in Article 81. The companies have appealed against this decision, without denying they took part in the cartel.
The action, announced on Tuesday, does not fall within the Commission's area of Community responsibility, but from its obligation to “keep a close check on the use of public money,” according to a spokeswoman. Nevertheless, it cannot use the files it has built up during the course of its investigation into the cartel as a source of evidence in this case. “Our lawyers don't get any privileged access” to the confidential versions of the Commission decisions, Todd said. The Commission confirmed it was currently assessing its contracts with a number of removal companies involved in another cartel. Allied Arthur Pierre, Compas, Coppens, Gosselin, Interdean, Mozer, Putters, Team Relocations, Transworld and Ziegler were fined almost €33 million for participating in a cartel (see EUROPE 9621).
The Commission is a good example of an organisation that is vulnerable to coordination of artificially high prices across the EU: it has considerable logistical needs, with premises in many different countries and bureaucratic procurement procedures. It also has the means to defend itself through private actions, where damages could very well be sizeable in cases where contracts are worth millions of euro. The same may not be said for the smallest companies which either do not have the same money available to go to court or cannot see it being worthwhile bringing a case for damages. This is a problem currently facing the Commission in its anti-cartel policy and which was the subject of a recent White Paper (see EUROPE 9365). One Belgian company has shown an innovative approach: Cartel Damages Claims (CDC) buys claims from its “customers”, companies which have been the victim of cartels. Once a worthwhile number of claims has been gathered, CDC takes the members of the cartel to court in their national courts (see EUROPE 9662). (C.D./transl.rt)