Commerce Commission takes action against electricity gear coys

By NZPA

Thursday 17th May 2007

The Commerce Commission is taking legal action against three European electricity equipment providers for alleged global cartel activity that has already seen fines of 750 million euros ($NZ1.4 billion) imposed overseas.

The alleged cartel supplied gas insulated switchgear, used to control the flow of electricity in substations, the commission said.

Its allegations were against French companies Alstom Holdings SA and Schneider Electric Industries SA, and German company Siemens AG.

Earlier this year, the European competition regulator fined the defendants and other companies more than 750 million euros for conduct based on the same cartel agreement, the commission said.

In a statement of claim filed in the Auckland High Court on April 20, the commission alleged that between 1988 and 2004 the companies gave effect and conspired to give effect in New Zealand to a global cartel for the supply of gas insulated switchgear.

It was alleged that the defendants implemented the price-fixing and bid-rigging cartel through their wholly-owned subsidiaries in New Zealand, the commission said.

Because the defendants in this case were all based overseas, the commission had needed leave from the High Court, which had been granted, to serve the proceedings abroad.

"While GIS technology is not widely used in New Zealand, these companies are major players in New Zealand electricity markets, supplying a wide range of products and services," commission chairwoman Paula Rebstock said.

"It is important that the commission takes action to ensure New Zealand is not seen as a soft touch for international cartels, and to warn these companies that anti-competitive conduct will not be tolerated."

The commission said its investigation was triggered by an application for leniency from one of the participants in the alleged cartel.

The commission's leniency policy meant immunity from commission-initiated proceedings could be granted to the first person involved in a cartel to come forward with information and co-operate fully with the commission in its investigation.

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