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EU imposes record billion-euro fine on lift cartels
Last Updated(Beijing Time):2007-02-22 14:37
The European Commission on Wednesday handed down a record antitrust fine of almost a billion euros over several lift companies for running illegal cartels.

The lift and elevator makers Otis, Kone, Schindler and Thyssen Krupp groups were given a combined penalty worth 992 million euros, the biggest ever fine imposed by the European Union's antitrust watchdog for cartel violations.

Those major lift companies was accused of operating cartels fo the installation and maintenance of lifts and escalators in Belgium, Germany, Luxembourg and the Netherlands between 1995 and 2004.

The European Commission conducted surprise inspections in January 2004 at the premises of those companies throughout Europe after receiving a tip-off about the cartel.

The three-year investigation revealed that they rigged bids for procurement contracts, fixed prices and allocated projects to each other, shared markets and exchanged commercially important and confidential information.

Even the European Commission's headquarters in Brussels and the EU courts building in Luxembourg were affected by their cartel arrangement.

The effects of this cartel may continue for twenty to fifty years as maintenance is often done by the companies that installed the equipment in the first place, and by cartelizing the installation, the companies distorted the markets for years to come, the Commission said.

Among those companies, Thyssen Krupp alone had to pay almost half of the total fine, the heaviest ever imposed by the Commission on a single company in a cartel case. The German group's fine was increased by 50 percent to 480 million euros because it was a repeated offender.

Otis, a unit of US conglomerate United Technologies Corp., received a fine of 225 million euros, followed by Switzerland-based Schindler with a penalty of 144 million euros and Kone of Finland with 142 million euros.

Japanese company Mitsubishi was also fined 1.8 million euros for its role limited to the Netherlands.

"The damage caused by this cartel will last for many years because it covered not only the initial supply but also the subsequent maintenance of lifts and elevators - for these companies the memory of this fine should last just as long." the EU Competition Commissioner Neelie Kroes said.

The United Technologies Corp. said in a statement that it felt disappointed with the Commission's decision and will appeal to the European Court of First Instance. Nine Otis employees in Europe have since been identified and dismissed for breaking the company's code of ethics.

Thyssen Krupp also said it was considering whether to appeal against the decision.

The European Commission imposed a total fine of 855 million euros on eight vitamin makers in 2001, the biggest penalty in an EU cartel case before Wednesday's decision. The fine was later reduced to 790 million euros by an EU court.

Almost a month ago, the Commission ordered ten companies to pay750 million euros for fixing prices and carving up the market in gas insulated switchgear.

Source:Xinhuanet 
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