Siemens hit with €396 million price fixing fine

German conglomerate Siemens has been fined €396 million over its role in a price fixing scandal. The European Commission has handed out a massive €750 million in fines to Siemens and others.

The company was involved in rigging tender prices and carving up markets, the Commission said. Its fine was the biggest of the companies involved because it was a ringleader, the Commission said.

The fine relates to the market for gas insulated switchgear (GIS). Between 1988 and 2004 the cartel operated to control prices and carve up markets between themselves, said the Commission.

Other companies included Alstrom, Areva, Schneider and Japanese firms Fuji, Hitachi, Mitsubishi Electric, Toshiba and Japan AE Systems. Switzerland's ABB was a whistleblower and escaped without any fine from the Commission.

The cartel swapped information on offers from customers and operated a quota system for the division of work. Bids were rigged so that tenders went to whichever firm was due work under the quota system.

"Code names were used for both companies and individuals. They relied on anonymous

email addresses for communication and used encryption for sending messages,” said the Commission.

"The Commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years," said Neelie Kroes, the Competition Commissioner. "The Commission has once more shown that it will not tolerate cartels in Europe."

Siemens said that it will appeal the fine. "We decided to fully book the fines in the three months through December,'' Udo Niehage, head of Siemens's power transmission and distribution unit, told a press conference. "The fines are completely exaggerated and we will take legal action, but we still have to transfer the fines within three months to the European authorities."

The equipment in question controls the flow of electricity in grid networks. The last fine of this size was the €790 million fine former Commissioner Mario Monti imposed on a vitamin cartel in 2001.