EU anti-trust fines exceeded $14 bn in 2004-09

August 20th, 2009 - 12:06 am ICT by IANS  

Brussels, Aug 19 (DPA) The total amount of fines slapped by the European Commission on businesses found guilty of violating its anti-trust rules since 2004 has exceeded the 10 billion euro ($14 billion) mark, officials in Brussels said Wednesday.
However, the figure is substantially lower than estimates of the harm caused by cartels to EU consumers - 7.6 billion euros between 2005 and 2007 - according to the commission’s Report on Competition Policy 2008.

The European Union’s executive arm in Brussels acts as a bastion of the bloc’s single market, fighting illegal subsidies, price-fixing cartels and all sorts of anti-competitive behaviours by businesses operating in Europe.

Its role has been strengthened by the appointment in November 2004 of Neelie Kroes, a no-nonsense liberal politician and former Dutch government minister who in 2006 climbed to number 38 in the Forbes’ list of the World’s 100 Most Powerful Women.

In the five years prior to her appointment, by contrast, the total amount of anti-trust fines imposed by the commission had totalled 3.7 billion euros, according to official figures.

Kroes’ most celebrated anti-trust crackdown involved software giant Microsoft, which was fined numerous times and was eventually forced to pay a total of 1.7 billion euros for using its market dominance to stifle its competitors.

The biggest single fine - 1.06 billion euros - was inflicted in May on US computer chip maker Intel after it was found guilty of bribing retailers and manufacturers to shut its main rival, Advanced Micro Devices (AMD), out of EU markets.

As far as cartels are concerned, the highest fine - 1.38 billion euros - was slapped in 2008 on four car manufacturers which connived to keep prices artificially high.

Other notable victims of Kroes’ wrath include energy giants E.ON of Germany and Gaz de France.

The proceeds of the commission’s anti-trust fines feed into the EU budget, meaning member states have to contribute correspondingly smaller amounts the following year.

The 2008 report for the first time estimates the harm caused by cartels to consumers by looking at 18 cases subject to commission decisions between 2005 and 2007.

Assuming an overcharge of between five and 15 percent, the harm caused by these cartels ranged from four to 11 billion euros, with a median figure of 7.6 billion euros.

However, the report warned that “even this figure is probably too low … since economic literature on the subject suggests that the average overcharge in prices can be as high as 20 to 25 percent”.

According to the 2008 report, the commission has also recovered more than nine billion euros in illegal and incompatible state aid since 2000.

Kroes, however, last year agreed to relax its office’s strict state-aid rules to help governments rescue banks which fell victim to the global credit crunch.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |

Subscribe