European Union: Significant Cartel Case Developments In February 2018

Court of Justice dismisses appeals in freight forwarding cartel case

On 1 February 2018, the Court of Justice of the European Union ("ECJ") delivered four judgments dismissing the appeals brought by participants involved in the air freight forwarding cartel.

By way of background, in 2012, the European Commission adopted a decision in which it found that a number of undertakings had fixed pricing mechanisms and surcharges for a variety of freight forwarding services, which the Commission considered to amount to four distinct infringements of the EU competition law rules: (i) the "New Export System" cartel relating to customs pre-clearance; (ii) the "Advanced Manifest System" cartel relating to the advance transmission of data on shipped goods; (iii) the "Currency Adjustment Factor" cartel relating to currency risks associated with the Chinese renminbi; and (iv) the "Peak Season Surcharge" cartel relating to temporary rate adjustments at certain times of high demand. The Commission imposed fines on corporate entities in the following groups in relation to these infringements: Kühne + Nagel, Schenker, Deutsche Bahn, Panalpina World Transport, Ceva and EGL. On 29 February 2016, the General Court ("GC") upheld the fines imposed by the Commission (see VBB on Competition Law, Volume 2016, No. 3, available at www.vbb.com). All of the companies appealed against the GC's judgments.

In its judgments on appeal, the ECJ held that the General Court correctly concluded that the Commission was entitled to base its calculations on the value of sales associated with freight forwarding services as a package of services on the trade routes concerned, rather than only on the turnover generated from the surcharges concerned by the cartel agreements. The ECJ also found that the cartels had an appreciable effect on trade between Member States and that the cartel activities did not fall within the exemption for the transport sector from the application of Regulation 17/62. Finally, the ECJ rejected arguments in relation to the attribution of liability of the fines imposed and pleas concerning the alleged disproportionate and unequal nature of the fines (Cases C-261/16, Kühne + Nagel International, C-263/16, Schenker, C-264/16, Deutsche Bahn and C-271/16 P, Panalpina World Transport).

European Commission imposes € 395 million fine on maritime car carriers for cartel behaviour

On 21 February 2018, the European Commission announced that it had adopted a decision under the cartel settlement procedure fining maritime car carriers a total of € 395 million. The companies involved in the decision, namely CSAV, "K" Line, MOL, NYK and WWL/EUKO, were found to have been involved in a cartel in the market of intercontinental transport of vehicles between Europe and other continents.

According to the Commission's press release, from October 2006 to September 2012, the carriers agreed to maintain the status quo in the market and to respect each other's traditional business on certain routes and with certain customers. They also allegedly quoted artificially high prices, or did not quote at all, in tenders issued by vehicle manufacturers.

The investigation started following an immunity application submitted by MOL, which was exempted from fines. In addition to the 10% fine reduction received under the Settlement Notice, the other carriers also received fine reductions under the Leniency Notice ranging from 20% for WWL-EUKOR to 50% for "K" Line. The Commission imposed fines ranging from over € 7 million on CSAV to over € 141 million on NYK.

European Commission imposes total fines of € 76 million on spark plugs suppliers

On 21 February 2018, the European Commission announced that it had imposed fines totalling € 76 million on a number of manufacturers for participating in a cartel concerning the supplies of spark plugs to car manufacturers in the EEA from 2000 to 2011. The Commission adopted its decision under the cartel settlement procedure. The companies involved in the cartel were Bosch, Denso and NGK.

Spark plugs are automotive electric devices in petrol car engines which deliver high voltage electric sparks to the combustion chamber. According to the Commission's press release, the companies exchanged commercially sensitive information, agreed on prices to be quoted to certain customers, agreed on the share of supplies to specific customers and agreed to respect historical supply rights. This coordination took place through bilateral agreements between Bosch and NGK and between Denso and NGK.

Denso received full immunity from fines under the Leniency Notice for being the first company to inform the Commission of the existence of the cartel. NGK and Bosch had their fines reduced by 42% and 28% respectively for cooperating with the Commission, in addition to the 10% fine reduction granted under the Settlement Notice. The Commission imposed fines of over € 45.8 million on Bosch and € 30.2 million on NGK.

European Commission imposes fines on manufacturers of braking systems

On 21 February 2018, the European Commission announced it had adopted a settlement decision in which it imposed fines totalling € 75 million on a number of manufacturers of braking systems for their involvement in two separate cartels. The companies involved were Bosch, Continental and TRW.

According to the Commission, in both cartels, the companies coordinated their market behaviour by exchanging commercially sensitive information, including on prices. The coordination took place at bilateral meetings, through phone conversations or email exchanges. More specifically, the first cartel, which lasted from February 2007 to March 2011, also concerned discussions of general sales conditions of hydraulic braking systems (HBS) for two car manufacturers, Daimler and BMW. The manufacturers involved were TRW, Bosch and Continental (the "HBS cartel"). The second cartel lasted from September 2010 to July 2011 and related to one specific tender for electronic braking systems (EBS) for Volkswagen (the "EBS cartel"). The companies involved in this infringement were Continental and Bosch.

TRW received full immunity under the Leniency Notice for revealing to the Commission the existence of the HBS cartel. Bosch and Continental had their fines reduced by 35% and 20% respectively for cooperating with the Commission, in addition to the 10% fine reduction received under the Settlement Notice. Ultimately, the Commission imposed fines of over € 44 million on Continental and over € 12 million on Bosch.

Continental was fully exempted from fines under the Leniency Notice for informing the Commission of the existence of the EBS cartel. Bosch was fined over € 19 million for its involvement, the amount of which takes into account a 30% fine reduction for its cooperation under the Leniency Notice and a 10% fine reduction under the Settlement Notice.

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