On 21st June 2017 the European Commission announced that it had fined Automotive Lighting and Hella over €26 million for participating in an automotive lighting cartel, in breach of Article 101 of the Treaty for the Functioning of the European Union and Article 53 of the EEA Agreement. A third member of the cartel, Valeo was not fined as it had blown the whistle on the cartel to the EU competition regulator.
Following an EU Commission investigation, all the companies admitted their involvement and agreed to settle.
This decision exposes the parties to potential actions for damages in national courts from original equipment manufacturers and authorised service providers for the loss they may suffered as a result of the increased prices charged by the cartel. The Commission urges third parties who have suffered such loss to seek redress.
According to EU law, a Commission decision constitutes binding proof before national courts that the anti-competitive behaviour took place and was illegal. Therefore litigants seeking redress only have to prove their loss to recover compensation from the cartel and its participants. The amount of the Commission’s fine is not taken into account when assessing damages.
The parties produced vehicle lighting systems. These included lighting systems such as headlamps (with LED, xenon or halogen technology), daytime running lights (with LEDs or traditional bulbs), rear lights and high-mounted stop lamps (with LEDs or traditional bulbs), fog lights and auxiliary lights.
The EU Commission investigation was concerned with the aftermarket segment for the supply of spare parts to original equipment manufacturer or their authorised service networks for passenger and commercial vehicles. The cartel related solely to the original equipment spare parts market for car models whose production had ended.
The Commission’s investigation revealed that, for more than three years, Automotive Lighting, Hella and Valeo coordinated prices and other trading conditions for the supply of vehicle lighting systems, across the European Economic Area (EEA). This was achieved by the three companies meeting, mainly bilaterally, at trade fairs, on the margins of supplier days organised by customers, during customer visits and independently. The companies discussed quotes for tenders and negotiation strategies and exchanged information on the status of negotiations with customers regarding price increases, as well as other information. In particular the cartelists agreed that they would increase prices on spare parts after the end of mass production of specific car models, and coordinated how long after that they would end contractual availability of the spare parts in question.
The Commission’s lighting systems decision is part of a series of major investigations into suspected cartels in the automotive parts sector. The Commission has already fined suppliers of automotive bearings, wire harnesses in cars, flexible foam used (inter alia) in car seats, parking heaters in cars and trucks, alternators, starters, air conditioning and engine cooling systems. It has other cases under active consideration including one concerning occupant safety systems.
The fines were set according to the EU Commission’s 2006 Guidelines on fines. These take into account the companies’ sales generated in the EEA in relation to the products covered by the cartel. The Commission also considered the serious nature of the infringement, its geographic scope and its duration.
As Valeo was the first to bring the cartel to the attention of the Commission it received full immunity, thereby avoiding a fine of more than €30.5 million.
Automotive Lighting and Hella also benefited from reductions in their fines for their cooperation with the investigation. The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the Commission to prove the existence of the cartel.
In addition, the Commission applied a reduction of 10% to the fines imposed in view of the parties’ acknowledgment of their participation in the cartel and of their liability in this respect under the special procedure the Commission has to expedite the dealing with cartel cases as set out in its 2008 Settlement Notice.
If you would like further information about recovering loss as a result of being a buyer from any of the cartel members please contact the author. In addition you may be interested in our “Claimant’s Guide to Antitrust/Competition Litigation in the European Union” which can be found here.