Brussels is seeking millions of euros in damages from four international lift companies that it has found guilty of running a decade-long price-fixing cartel.
The European Commission has fined Otis of the US, Finland's Kone, Swiss-based Schindler and Germany's ThyssenKrupp a total of €992m ($1.5bn, £784m).
But yesterday the Commission said it was taking the four to court in Belgiumover a claim of financial damage caused by inflated contract prices for its buildings and those of other EU institutions in Brussels and Luxembourg. The multi-million euro contracts covered the installation and maintenance of lifts and escalators from 1995 to 2004.
It is the first time Brussels has sued a cartel on its own behalf in the civil courts and comes as the Commission puts increasing pressure on companies that fix prices.
Fines have risen sharply underguidelines linking them more closely to the size of the market affected and the duration of the abuse. Brussels raised more than €3.3bn in cartel fines last year compared with €390m in 2004 and there is speculation two more blockbuster penaltiesare in the pipeline.
Officials have also been trying to help private victims to win damages. The Commission's competition department this year forwarded proposals to make it easier for groups of consumers to bring proceedings against cartels.
"We are leading by example," Neelie Kroes, competition commissioner, said.
The Commission would not specify the amount of damages it sought, but did hint that the move would not be its last: itis consideringaction against 10 Belgium-based removal companies found guilty of cartel behaviour and fined nearly €33m this year.
Schindler, the only one of the four lift companies to comment yesterday, said that there had been evidence of collusion but that it did not believe that this had resulted in higher prices. "It had no effect," an official claimed.
Showing posts with label elevator companies. Show all posts
Showing posts with label elevator companies. Show all posts
Wednesday, June 25, 2008
EU: Elevator firms colluded on prices
The European Commission said Tuesday it would sue four elevator companies for damages that the EU headquarters suffered as a customer of a price-fixing cartel.
The EU's executive said it would seek compensation from Germany's ThyssenKrupp AG, Finland's Kone Corp., Switzerland's Schindler and United Technologies' unit Otis Elevator of the United States for what it said was collusion to raise the cost of elevators in EU buildings in Belgium and Luxembourg.
It put no price tag on the damages it suffered, saying the contracts were too complicated to calculate a figure at this stage.
It said the case it will take to a Belgian commercial court would help identify the total amount overpaid.
''As a result of the anticompetitive behavior of these companies, the EU institutions, and so the European taxpayer, have suffered financially by paying over the odds for the installation and maintenance of lifts and escalators,'' said Siim Kallas, the EU's top administration official.
EU Competition Commissioner Neelie Kroes said EU regulators also wanted to encourage other victims of cartels to seek damages in the national courts. ''We are leading by example,'' she said.
Although cartels are punished by paying fines to EU or national regulators, few customers take cases to win compensation, something the European Commission wants to change, saying private legal action would act as an extra deterrent against potential price-fixing
EU spokeswoman Valerie Rampi said the commission was also thinking of bringing another damages case against Belgian removal companies that regulators fined in March for fixing the price of shipping furniture for diplomats and European Union officials moving to and from Brussels.
EU regulators said they were worried that the elevator cartel could continue to hurt building owners for many years because elevator companies usually carry out maintenance on the equipment they installed.
Cartels push up average prices by between 20 percent and 30 percent, they said.
Kone refused to comment while a Schindler spokesman said the company was waiting for the EU to specify the level of damages.
In February 2007, the EU's antitrust unit fined the companies 992 million euros ($1.3 billion) for running a cartel from 1995 to 2004 to rig bids for public contracts.
The EU's executive said it would seek compensation from Germany's ThyssenKrupp AG, Finland's Kone Corp., Switzerland's Schindler and United Technologies' unit Otis Elevator of the United States for what it said was collusion to raise the cost of elevators in EU buildings in Belgium and Luxembourg.
It put no price tag on the damages it suffered, saying the contracts were too complicated to calculate a figure at this stage.
It said the case it will take to a Belgian commercial court would help identify the total amount overpaid.
''As a result of the anticompetitive behavior of these companies, the EU institutions, and so the European taxpayer, have suffered financially by paying over the odds for the installation and maintenance of lifts and escalators,'' said Siim Kallas, the EU's top administration official.
EU Competition Commissioner Neelie Kroes said EU regulators also wanted to encourage other victims of cartels to seek damages in the national courts. ''We are leading by example,'' she said.
Although cartels are punished by paying fines to EU or national regulators, few customers take cases to win compensation, something the European Commission wants to change, saying private legal action would act as an extra deterrent against potential price-fixing
EU spokeswoman Valerie Rampi said the commission was also thinking of bringing another damages case against Belgian removal companies that regulators fined in March for fixing the price of shipping furniture for diplomats and European Union officials moving to and from Brussels.
EU regulators said they were worried that the elevator cartel could continue to hurt building owners for many years because elevator companies usually carry out maintenance on the equipment they installed.
Cartels push up average prices by between 20 percent and 30 percent, they said.
Kone refused to comment while a Schindler spokesman said the company was waiting for the EU to specify the level of damages.
In February 2007, the EU's antitrust unit fined the companies 992 million euros ($1.3 billion) for running a cartel from 1995 to 2004 to rig bids for public contracts.
Thursday, June 12, 2008
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)
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)
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