EU wants damages from elevator cartel firms

The European Commission is seeking compensation from four manufacturers of elevators and escalators which it previously fined 992 million euros ($1.5 billion) in the European Union's biggest ever cartel case. The move opens a new front in the Commission's campaign to punish companies it finds are breaking competition rules. A Commission spokesman said the EU executive wants damages from Thyssenkrupp (TKAG.DE: Quote, Profile, Research), Otis (UTX.N: Quote, Profile, Research), Schindler (SCHN.S: Quote, Profile, Research) and Kone (KNEBV.HE: Quote, Profile, Research) for the extra costs it incurred when installing their products in EU buildings.

The headquarters of the European Commission and the EU courts building in Luxembourg were all affected by the cartel. "We are going for damages," said Maximilian Strotmann, a spokesman for EU Administration, Audit and Fraud Commissioner Siim Kallas. "We have a duty ... to seek damages to protect the Commission and the taxpayer."

Kone received a letter from the Commission "in the role of a customer seeking compensation in Belgium from elevator companies relating to the old cartel case," a Kone spokeswoman said.
"We will deal with it as with all potential client demands. We will now investigate its content," Minna Mars said. A Commission source said the Commission is seeking a total of between 1 million and 10 million euros from the companies.

That is a tiny fraction of the fine the Commission imposed against the companies for fixing prices and carving up markets. But the move helps carry out a policy spelt out when the Commission announced the record fines in February, 2007. A Commission spokesman at the time invited companies that suffered from the cartel to pursue damages in national courts and seek to annul and renegotiate long-term service contracts. More broadly, the Commission has been working on new approaches to encourage people and companies injured by cartels to bring private lawsuits.

There are many barriers to such suits in Europe. In United States, law makes it relatively easy to bring suits which require damages to be paid three times over.
In the elevator case, Germany's ThyssenKrupp incurred the highest-ever fine for a single company, 480 million euros. The Commission fined Otis, owned by United Technologies of the United States, 225 million euros. Kone of Finland was fined 142 million euros and Schindler of Switzerland was fined 144 million euros. Mitsubishi Electric Corp of Japan was fined 1.8 million euros for participating in the Dutch portion of the cartel.

The companies had fixed prices, rigged bids and allocated projects to each other in Belgium, Germany, Luxembourg and the Netherlands between 1995 and 2004, the decision said. (Additional reporting by Sami Torma in Helsinki; Editing by Louise Ireland)