The European Commission has informed automotive starter batteries manufacturers Banner, Clarios (former JC Autobatterie), Exide, FET (and its predecessor Elettra), and Rombat as well as trade association Eurobat and its service provider Kellen of its preliminary view that they have breached EU antitrust rules by colluding to increase the prices of automotive starter batteries sold to car producers in the European Economic Area (‘EEA’).
Automotive starter batteries provide an electric current to the starting motor, which starts the engine in cars powered by traditional combustion engines. They also supply power to the electrical equipment of cars.
The Commission has concerns that between 2004 until 2017 the five starter batteries manufacturers created, published and agreed to use new indices in their price negotiations with car producers (the so-called ‘Eurobat Premium System’). The aim of this alleged conduct was to fix an important element of the final battery price.
The Commission is also concerned that Eurobat and its service provider Kellen were aware of the alleged conduct and actively contributed to it by assisting the battery manufacturers in creating and running the Eurobat premium system.
The alleged conduct concerns automotive starter batteries sold to car producers in the EEA for use (i) in new cars; and (ii) as replacements (but only if sold via the car producers’ service network of authorised repairers).
If the Commission’s preliminary view is confirmed, this conduct would infringe Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) and Article 53 of the EEA Agreement, which prohibit cartels and other restrictive business practices. This prohibition includes anticompetitive conduct by associations of companies.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Background on procedure
A Statement of Objections is a formal step in the Commission’s investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The parties can then examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their views on the case before representatives of the Commission and national competition authorities.
If the Commission concludes, after the parties have exercised their rights of defence, that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of a company’s annual worldwide turnover.
There is no legal deadline for the Commission to complete antitrust inquiries into anticompetitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperates with the Commission and the exercise of the rights of defence.
The Commission has carried out a series of major investigations into cartels in the automotive 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 and starters, air conditioning and engine cooling systems, lighting systems, occupant safety systems to certain Japanese and European car manufacturers, braking systems and spark plugs. The Commission also fined car manufacturers €875 million for restricting competition in emission cleaning for new diesel passenger cars.
For more information
More information will be made available under the case number AT.40545 in the public case register on the Commission’s competition website.
For more information on the Commission’s actions against cartels, including on how individuals or companies can report suspicious cartel behaviour see the Commission’s dedicated cartels website. A periodic compilation of antitrust and cartel news is available in the Competition Weekly News Summary and statistics on cartel enforcement.
Quotes
To be effective, competition requires economic operators to act and to determine their prices independently of each other. We are concerned that batteries suppliers limited price competition, thus harming their customers, in this case car producers, and, ultimately, European consumers. The addressees of the Statement of Objections now have the possibility to respond to our concerns.